Nicaragua
Nicaragua, the poorest country in Central America and the
second poorest in the Hemisphere, has widespread underemployment and
poverty. The US-Central America Free Trade Agreement (CAFTA) has
been in effect since April 2006 and has expanded export
opportunities for many agricultural and manufactured goods. Textiles
and apparel account for nearly 60% of Nicaragua's exports, but
increases in the minimum wage during the ORTEGA administration will
likely erode its comparative advantage in this industry. ORTEGA's
promotion of mixed business initiatives, owned by the Nicaraguan and
Venezuelan state oil firms, together with the weak rule of law,
could undermine the investment climate for domestic and
international private firms in the near-term. Nicaragua relies on
international economic assistance to meet internal- and
external-debt financing obligations. Foreign donors have curtailed
this funding, however, in response to November 2008 electoral fraud.
Managua has an IMF extended Credit Facility program, which could
help keep the government's fiscial deficit on target during the 2011
election year and encourage transparency in the use of Venezuelan
off-budget loans and assistance. In early 2004, Nicaragua secured
some $4.5 billion in foreign debt reduction under the Heavily
Indebted Poor Countries (HIPC) initiative, however, Managua still
struggles with a high public debt burden. Nicaragua is gradually
recovering from the global economic crisis as increased exports
drove positive growth in 2010. The economy is expected to grow at a
rate of about 3% in 2011.
Niger
Niger is a landlocked, Sub-Saharan nation, whose economy
centers on subsistence crops, livestock, and some of the world's
largest uranium deposits. Drought, desertification, and strong
population growth have undercut the economy. Niger shares a common
currency, the CFA franc, and a common central bank, the Central Bank
of West African States (BCEAO), with seven other members of the West
African Monetary Union. In December 2000, Niger qualified for
enhanced debt relief under the International Monetary Fund program
for Highly Indebted Poor Countries (HIPC) and concluded an agreement
with the Fund on a Poverty Reduction and Growth Facility (PRGF).
Debt relief provided under the enhanced HIPC initiative
significantly reduces Niger's annual debt service obligations,
freeing funds for expenditures on basic health care, primary
education, HIV/AIDS prevention, rural infrastructure, and other
programs geared at poverty reduction. In December 2005, Niger
received 100% multilateral debt relief from the IMF, which
translates into the forgiveness of approximately US $86 million in
debts to the IMF, excluding the remaining assistance under HIPC. In
2010, the Niger economy was recovering from the effects of a 2009
drought that reduced grain and cowpea production and decimated
livestock herds. The economy was also hurt when the international
community cut off non-humanitarian aid in response to TANDJA's moves
to extend his term as president. Nearly half of the government's
budget is derived from foreign donor resources. Future growth may be
sustained by exploitation of oil, gold, coal, and other mineral
resources.
Nigeria
Oil-rich Nigeria has been hobbled by political instability,
corruption, inadequate infrastructure, and poor macroeconomic
management but in 2008 began pursuing economic reforms. Nigeria's
former military rulers failed to diversify the economy away from its
overdependence on the capital-intensive oil sector, which provides
95% of foreign exchange earnings and about 80% of budgetary
revenues. Following the signing of an IMF stand-by agreement in
August 2000, Nigeria received a debt-restructuring deal from the
Paris Club and a $1 billion credit from the IMF, both contingent on
economic reforms. Nigeria pulled out of its IMF program in April
2002, after failing to meet spending and exchange rate targets,
making it ineligible for additional debt forgiveness from the Paris
Club. In November 2005, Abuja won Paris Club approval for a
debt-relief deal that eliminated $18 billion of debt in exchange for
$12 billion in payments - a total package worth $30 billion of
Nigeria's total $37 billion external debt. Since 2008 the government
has begun to show the political will to implement the
market-oriented reforms urged by the IMF, such as modernizing the
banking system, curbing inflation by blocking excessive wage
demands, and resolving regional disputes over the distribution of
earnings from the oil industry. GDP rose strongly in 2007-10 because
of increased oil exports and high global crude prices in 2010.
President JONATHAN has pledged to continue the economic reforms of
his predecessor with emphasis on infrastructure improvements.
Infrastructure is the main impediment to growth and in August 2010
JONATHAN unveiled a power sector blueprint that includes
privatization of the state-run electricity generation and
distribution facilities. The government also is working toward
developing stronger public-private partnerships for roads. Nigeria's
financial sector was hurt by the global financial and economic
crises and the Central Bank governor has taken measures to
strengthen that sector.
Niue
The economy suffers from the typical Pacific island problems of
geographic isolation, few resources, and a small population.
Government expenditures regularly exceed revenues, and the shortfall
is made up by critically needed grants from New Zealand that are
used to pay wages to public employees. Niue has cut government
expenditures by reducing the public service by almost half. The
agricultural sector consists mainly of subsistence gardening,
although some cash crops are grown for export. Industry consists
primarily of small factories to process passion fruit, lime oil,
honey, and coconut cream. The sale of postage stamps to foreign
collectors is an important source of revenue. The island in recent
years has suffered a serious loss of population because of
emigration to New Zealand. Efforts to increase GDP include the
promotion of tourism and financial services, although the
International Banking Repeal Act of 2002 resulted in the termination
of all offshore banking licenses. Economic aid from New Zealand in
FY08/09 was US$5.7 million. Niue suffered a devastating typhoon in
January 2004, which decimated nascent economic programs. While in
the process of rebuilding, Niue has been dependent on foreign aid.
Norfolk Island
Tourism, the primary economic activity, has steadily
increased over the years and has brought a level of prosperity
unusual among inhabitants of the Pacific islands. The agricultural
sector has become self sufficient in the production of beef,
poultry, and eggs.
Northern Mariana Islands
The economy benefits substantially from
financial assistance from the US. The rate of funding has declined
as locally generated government revenues have grown. The key tourist
industry employs about 50% of the work force and accounts for
roughly one-fourth of GDP. Japanese tourists predominate. Annual
tourist entries have exceeded one-half million in recent years, but
financial difficulties in Japan have caused a temporary slowdown.
The agricultural sector is made up of cattle ranches and small farms
producing coconuts, breadfruit, tomatoes, and melons. Garment
production is by far the most important industry with the employment
of 17,500 mostly Chinese workers and sizable shipments to the US
under duty and quota exemptions.
Norway
The Norwegian economy is a prosperous bastion of welfare
capitalism, featuring a combination of free market activity and
government intervention. The government controls key areas, such as
the vital petroleum sector, through large-scale state-majority-owned
enterprises. The country is richly endowed with natural resources -
petroleum, hydropower, fish, forests, and minerals - and is highly
dependent on the petroleum sector, which accounts for nearly half of
exports and over 30% of state revenue. Norway is the world's
second-largest gas exporter; its position as an oil exporter has
slipped to ninth-largest as production has begun to decline. Norway
opted to stay out of the EU during a referendum in November 1994;
nonetheless, as a member of the European Economic Area, it
contributes sizably to the EU budget. In anticipation of eventual
declines in oil and gas production, Norway saves almost all state
revenue from the petroleum sector in the world's second largest
sovereign wealth fund, valued at over $500 billion in 2010. After
lackluster growth of less than 1.5% in 2002-03, GDP growth picked up
to 2.5-6.2% in 2004-07, partly due to higher oil prices. Growth fell
to 1.8% in 2008, and the economy contracted by 1.4% in 2009 as a
result of the slowing world economy and the drop in oil prices.
Oman
Oman is a middle-income economy that is heavily dependent on
dwindling oil resources. Because of declining reserves, Muscat has
actively pursued a development plan that focuses on diversification,
industrialization, and privatization, with the objective of reducing
the oil sector's contribution to GDP to 9% by 2020. Tourism and
gas-based industries are key components of the government's
diversification strategy. By using enhanced oil recovery techniques,
Oman succeeded in increasing oil production, giving the country more
time to diversify, and the increase in global oil prices thoughout
2010 provides the government greater financial resources to invest
in non-oil sectors.
Pacific Ocean
The Pacific Ocean is a major contributor to the world
economy and particularly to those nations its waters directly touch.
It provides low-cost sea transportation between East and West,
extensive fishing grounds, offshore oil and gas fields, minerals,
and sand and gravel for the construction industry. In 1996, over 60%
of the world's fish catch came from the Pacific Ocean. Exploitation
of offshore oil and gas reserves is playing an ever-increasing role
in the energy supplies of the US, Australia, NZ, China, and Peru.
The high cost of recovering offshore oil and gas, combined with the
wide swings in world prices for oil since 1985, has led to
fluctuations in new drillings.
Pakistan
Pakistan, an impoverished and underdeveloped country, has
suffered from decades of internal political disputes and low levels
of foreign investment. Between 2001-07, however, poverty levels
decreased by 10%, as Islamabad steadily raised development spending.
Between 2004-07, GDP growth in the 5-8% range was spurred by gains
in the industrial and service sectors - despite severe electricity
shortfalls - but growth slowed in 2008-09 and unemployment rose.
Inflation remains the top concern among the public, climbing from
7.7% in 2007 to more than 13% in 2010. In addition, the Pakistani
rupee has depreciated since 2007 as a result of political and
economic instability. The government agreed to an International
Monetary Fund Standby Arrangement in November 2008 in response to a
balance of payments crisis, but during 2009-10 its current account
strengthened and foreign exchange reserves stabilized - largely
because of lower oil prices and record remittances from workers
abroad. Record floods in July-August 2010 lowered agricultural
output and contributed to a jump in inflation, and reconstruction
costs will strain the limited resources of the government. Textiles
account for most of Pakistan's export earnings, but Pakistan's
failure to expand a viable export base for other manufactures has
left the country vulnerable to shifts in world demand. Other long
term challenges include expanding investment in education,
healthcare, and electricity production, and reducing dependence on
foreign donors.