The 2010 CIA World Factbook

by United States. Central Intelligence Agency

Uzbekistan
Uzbekistan is a dry, landlocked country; 11% of the land
is intensely cultivated, in irrigated river valleys. More than 60%
of the population lives in densely populated rural communities.
Export of hydrocarbons, including natural gas and petroleum,
provided about 40% of foreign exchange earnings in 2009. Other major
export earners include gold and cotton. Uzbekistan is now the
world's second-largest cotton exporter and fifth largest producer;
it has come under increasing international criticism for the use of
child labor in its annual cotton harvest. Nevertheless, Uzbekistan
enjoyed a bumper cotton crop in 2010 amidst record high prices.
Following independence in September 1991, the government sought to
prop up its Soviet-style command economy with subsidies and tight
controls on production and prices. While aware of the need to
improve the investment climate, the government still sponsors
measures that often increase, not decrease, its control over
business decisions. A sharp increase in the inequality of income
distribution has hurt the lower ranks of society since independence.
In 2003, the government accepted Article VIII obligations under the
IMF, providing for full currency convertibility. However, strict
currency controls and tightening of borders have lessened the
effects of convertibility and have also led to some shortages that
have further stifled economic activity. The Central Bank often
delays or restricts convertibility, especially for consumer goods.
Potential investment by Russia and China in Uzbekistan's gas and oil
industry, as well as increased cooperation with South Korea in the
realm of civil aviation, may boost growth prospects. However,
decreased demand for natural gas in Europe and Russia in the wake of
the global financial crisis could reduce energy-related revenues in
the near term. In November 2005, Russian President Vladimir PUTIN
and Uzbekistan President KARIMOV signed an "alliance," which
included provisions for economic and business cooperation. Russian
businesses have shown increased interest in Uzbekistan, especially
in mining, telecom, and oil and gas. In 2006, Uzbekistan took steps
to rejoin the Collective Security Treaty Organization (CSTO) and the
Eurasian Economic Community (EurASEC), which it subsequently left in
2008, both organizations dominated by Russia. In the past Uzbek
authorities had accused US and other foreign companies operating in
Uzbekistan of violating Uzbek tax laws and have frozen their assets,
but no new expropriations occurred in 2008-09. Instead, the Uzbek
Government has actively courted several major U.S. and international
corporations, offering attractive financing and tax advantages, and
has landed a significant US investment in the automotive industry.
Although growth slowed in 2009-10, Uzbekistan has seen few other
effects from the global economic downturn, primarily due to its
relative isolation from the global financial markets.

Vanuatu
This South Pacific island economy is based primarily on
small-scale agriculture, which provides a living for about
two-thirds of the population. Fishing, offshore financial services,
and tourism, with nearly 197,000 visitors in 2008, are other
mainstays of the economy. Mineral deposits are negligible; the
country has no known petroleum deposits. A small light industry
sector caters to the local market. Tax revenues come mainly from
import duties. Economic development is hindered by dependence on
relatively few commodity exports, vulnerability to natural
disasters, and long distances from main markets and between
constituent islands. In response to foreign concerns, the government
has promised to tighten regulation of its offshore financial center.
In mid-2002, the government stepped up efforts to boost tourism
through improved air connections, resort development, and cruise
ship facilities. Agriculture, especially livestock farming, is a
second target for growth. Australia and New Zealand are the main
suppliers of tourists and foreign aid.

Venezuela
Venezuela remains highly dependent on oil revenues, which
account for roughly 95% of export earnings, about 55% of the federal
budget revenues, and around 30% of GDP. A nationwide strike between
December 2002 and February 2003 had far-reaching economic
consequences - real GDP declined by around 9% in 2002 and 8% in 2003
- but economic output since then has recovered strongly. Fueled by
high oil prices, record government spending helped to boost GDP by
about 10% in 2006, 8% in 2007, and nearly 5% in 2008, before a sharp
drop in oil prices caused a contraction in 2009-10. This spending,
combined with recent minimum wage hikes and improved access to
domestic credit, has created a consumption boom but has come at the
cost of higher inflation - roughly 32% in 2008, and slowing only
slightly to 30% in 2010, despite the lengthy downturn. Imports also
jumped significantly before the recession of 2009. President Hugo
CHAVEZ's continued efforts to increase the government's control of
the economy by nationalizing firms in the agribusiness, financial,
construction, oil, and steel sectors have hurt the private
investment environment, reduced productive capacity, and slowed
non-petroleum exports. In the first half of 2010 Venezuela faced the
prospect of lengthy nationwide blackouts when its main hydroelectric
power plant - which provides more than 35% of the country's
electricity - nearly shut down. In January, 2010, CHAVEZ announced a
dual exchange rate system for the bolivar and closed the unofficial
foreign exchange market - the "parallel" market - in an effort to
stem inflation and slow the currency's depreciation. The foreign
exchange system offers a 2.6 bolivar per dollar rate for imports of
essentials, including food, medicine, and industrial machinery, and
a 4.3 bolivar per dollar rate for imports of other products,
including cars and telephones.

Vietnam
Vietnam is a densely-populated developing country that in
the last 30 years has had to recover from the ravages of war, the
loss of financial support from the old Soviet Bloc, and the
rigidities of a centrally-planned economy. Vietnamese authorities
have reaffirmed their commitment to economic liberalization and
international integration. They have moved to implement the
structural reforms needed to modernize the economy and to produce
more competitive export-driven industries. Vietnam joined the WTO in
January 2007 following more than a decade-long negotiation process.
WTO membership has provided Vietnam an anchor to the global market
and reinforced the domestic economic reform process. Agriculture's
share of economic output has continued to shrink from about 25% in
2000 to about 21% in 2009. Deep poverty has declined significantly
and Vietnam is working to create jobs to meet the challenge of a
labor force that is growing by more than one million people every
year. The global recession has hurt Vietnam's export-oriented
economy with GDP growing less than the 7% per annum average achieved
during the last decade. In 2009 exports fell nearly 10%
year-on-year, prompting the government to consider adjustments to
tariffs to limit the trade deficit. The government has used stimulus
spending, including a subsidized lending program, to help the
economy through the global financial crisis. Vietnam's managed
currency, the dong, faced downward pressure during the recession and
the government devalued it by nearly 7% in December 2009. Foreign
donors pledged $8 billion in new development assistance for 2010.
Export growth resumed in 2010, driving GDP upward. However, Hanoi
has struggled to control one of the region's highest inflation
rates, which stands at 11.1% with interest hikes and multiple
devaluations of the dong. Vietnam's economy faces higher lending
rates, additional IMF scrutiny, domestic inflationary pressures, and
an underperforming stock market.

Virgin Islands
Tourism is the primary economic activity, accounting
for 80% of GDP and employment. The islands hosted 2.4 million
visitors in 2008. The manufacturing sector consists of petroleum
refining, rum distilling, textiles, electronics, pharmaceuticals,
and watch assembly. One of the world's largest petroleum refineries
is at Saint Croix. The agricultural sector is small, with most food
being imported. International business and financial services are
small but growing components of the economy. The islands are
vulnerable to substantial damage from storms. The government is
working to improve fiscal discipline, to support construction
projects in the private sector, to expand tourist facilities, to
reduce crime, and to protect the environment.

Wake Island
Economic activity is limited to providing services to
military personnel and contractors located on the island. All food
and manufactured goods must be imported.

Wallis and Futuna
The economy is limited to traditional subsistence
agriculture, with about 80% of labor force earnings from agriculture
(coconuts and vegetables), livestock (mostly pigs), and fishing.
About 4% of the population is employed in government. Revenues come
from French Government subsidies, licensing of fishing rights to
Japan and South Korea, import taxes, and remittances from expatriate
workers in New Caledonia.

West Bank
The West Bank - the larger of the two areas comprising the
Palestinian territories - experienced a high single-digit economic
growth rate in 2010 as a result of inflows of donor aid, the
Palestinian Authority's (PA) implementation of economic and security
reforms, and the easing of some movement and access restrictions by
the Israeli Government. Nevertheless, overall standard-of-living
measures remain near levels seen prior to the start of the second
intifada in 2000. The almost decade-long downturn largely has been a
result of Israeli closure policies - a steady increase in movement
and access restrictions across the West Bank in response to Israeli
security concerns which have disrupted labor and trade flows,
industrial capacity, and basic commerce, both external and internal.
Since 2008, the PA under President Mahmoud ABBAS and Prime Minister
Salam FAYYAD has implemented a largely successful campaign of
institutional reforms that has contributed to increased security and
economic performance, supported by more than $3 billion in direct
foreign donor assistance to the PA's budget since 2007. An easing of
some Israeli restrictions on West Bank movement and access since
2008 also has contributed to an uptick in retail activity in larger
cities. The biggest impediments to economic improvements in the West
Bank remain Palestinians' lack of access to land and resources in
Israeli-controlled areas, import and export restrictions, and a
high-cost capital structure. Absent robust private sector growth,
the PA will continue to rely heavily on donor aid for its budgetary
needs.

Western Sahara
Western Sahara has a small market-based economy whose
main indutries are fishing, phosphate mining, and pastoral nomadism.
The territory's arid desert climate makes sedentary agriculture
difficult, and Wstern Sahara imports much of its food. The Moroccan
Government administers Western Sahara's economy and is a source of
employment, infrstructure development, and social spending in the
territory. Western Sahara's unresolved legal status makes the
exploitation of its natural resources a contentious issue between
Morocco and the Polisario. Morocco and the EU in July 2006 signed a
four-year agreement allowing European vessels to fish off the coast
of Morocco, including the disputed waters off the coast of Western
Sahara. Oil has never been found in Western Sahara in commercially
significant quantities, but Morocco and the Polisario have quarreled
over who has the right to authorize and benefit from oil exploration
in the territory. Western Sahara's main long-term economic challenge
is the development of a more diverse set of industries capable of
providing greater employment and income to the territory.

World In 2010, world output - and per capita income - began to recover from the 2008-09 recession, the first global downturn since 1946. Gross World Product (GWP) grew 4.6%, largely on the strength of rebounding exports, which rose about 20% from the level of 2009. Growth was not evenly distributed across countries, however. Lower income countries - those with per capita incomes below $30,000 per year - averaged 6.3% growth, while higher income countries - with per capita incomes above $30,000 - averaged just 2.8% growth. And countries with current account surpluses averaged 6.0% growth, while those with current account deficits averaged just 3.4% growth. Among large economies, China (+10.1%), Taiwan (+8.3%), India (+8.3%), Brazil (+7.5%), and South Korea (+6.1%) recorded the biggest GDP gains - China also became the world's largest exporter. Continuing uncertainties in mortgage and financial markets resulted in slower growth in Japan (+3.0%), the US (+2.8%), and the European Union (+1.7%). In 2010, global unemployment continued to creep upwards, reaching 8.8% - underemployment, especially in the developing world, remained much higher. Global gross fixed investment stabilized at about 23% of GWP, after a significant drop in 2009. World trade appears to be returning to pre-2009 patterns, with current account surpluses or deficits rising for a majority of countries. World external debt, however, dropped again in 2010 - about 5% from the 2009 level, as many countries reduced borrowing. Many, if not most, countries pursued expansionary monetary and fiscal policies. The global money supply, both narrowly and broadly defined, increased roughly 10%, as countries tried to keep interest rates low; the global budget deficit stablilized at roughly $3.5 trillion, as countries tried to rein in spending and slow the rise of public debt. The international financial crisis of 2008-09 presents the world economy with a major new challenge, together with several long-standing ones. The fiscal stimulus packages put in place in 2009-10 required most countries to run budget deficits - government balances have deteriorated for 14 out of every 15 countries. Treasuries issued new public debt - totaling $5.5 trillion since 2008 - to pay for the additional expenditures. To keep interest rates low, many central banks monetized that debt, injecting large sums of money into the economies. As economic activity picks up, central banks will face the difficult task of containing inflation without raising interest rates so high they snuff out further growth. At the same time, governments will face the difficult task of spurring current growth and employment without saddling their economies with so much debt that they sacrifice long-term growth and financial stability. Long-standing challenges the world faces are several. The addition of 80 million people each year to an already overcrowded globe is exacerbating the problems of underemployment, pollution, waste-disposal, epidemics, water-shortages, famine, over-fishing of oceans, deforestation, desertification, and depletion of non-renewable resources. The nation-state, as a bedrock economic-political institution, is steadily losing control over international flows of people, goods, funds, and technology. Internally, central governments often find their control over resources slipping as separatist regional movements - typically based on ethnicity - gain momentum, e.g., in many of the successor states of the former Soviet Union, in the former Yugoslavia, in India, in Iraq, in Indonesia, and in Canada. Externally, central governments are losing decisionmaking powers to international bodies, most notably the EU. The introduction of the euro as the common currency of much of Western Europe in January 1999, while paving the way for an integrated economic powerhouse, poses economic risks because the participating nations are culturally and politically diverse and have varying levels and rates of growth of income, and hence, differing needs for monetary and fiscal policies. In Western Europe, governments face the difficult political problem of channeling resources away from welfare programs in order to increase investment and strengthen incentives to seek employment. Because of their own internal problems and priorities, the industrialized countries devote insufficient resources to deal effectively with the poorer areas of the world, which, at least from an economic point of view, are becoming further marginalized. The terrorist attacks on the US on 11 September 2001 accentuated a growing risk to global prosperity, illustrated, for example, by the reallocation of resources away from investment to anti-terrorist programs. Wars in Iraq and Afghanistan added new uncertainties to global economic prospects. Despite these challenges, the world economy also shows great promise. Technology has made possible further advances in all fields, from agriculture, to medicine, alternative energy, metallurgy, and transportation. Improved global communications have greatly reduced the costs of international trade, helping the world gain from the international division of labor, raise living standards, and reduce income disparities among nations. Much of the resilience of the world economy in the aftermath of the financial crisis resulted from government leaders around the globe working in concert to stem the financial onslaught, knowing well the lessons of past economic failures.