United States. Central Intelligence Agency

“ Baku has only recently begun making progress on economic reform, and old economic ties and structures are slowly being replaced. An obstacle to economic progress, including stepped up foreign investment in the non-energy sector, is 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 pipelines in the region, and Azerbaijan's ability to manage its oil wealth. ”

“ Although ultimately a victor in World Wars I and II, France suffered extensive losses in its empire, wealth, manpower, and rank as a dominant nation-state. Nevertheless, France today is one of the most modern countries in the world and is a leader among European nations. Since 1958, it has constructed a presidential democracy resistant to the instabilities experienced in earlier parliamentary democracies. In recent years, its reconciliation and cooperation with Germany have proved central to the economic integration of Europe, including the advent of the euro in January 1999. ”

“ Through fiscal discipline and sound management, Botswana has transformed itself from one of the poorest countries in the world to a middle-income country with a per capita GDP of $7,800 in 2001. Two major investment services rank Botswana as the best credit risk in Africa. Diamond mining has fueled much of expansion and currently accounts for more than one-third of GDP and for four-fifths of export earnings. Tourism, subsistence farming, and cattle raising are other key sectors. On the downside, the government must deal with high rates of unemployment and poverty. ”

“ Economy - overview: As one of the Four Tigers of East Asia, South Korea has achieved an incredible record of growth. Three decades ago GDP per capita was comparable with levels in the poorer countries of Africa and Asia. Today its GDP per capita is seven times India's, 17 times North Korea's, and comparable to the lesser economies of the European Union. This success through the late 1980s was achieved by a system of close government/business ties, including directed credit, import restrictions, sponsorship of specific industries, and a strong labor effort. ”

“ The economy is a mixture of village agriculture and handicrafts, an industrial sector based largely on oil, support services, and a government characterized by budget problems and overstaffing. 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. ”

“ The modernization and integration of the eastern German economy continues to be a costly long-term problem, with annual transfers from west to east amounting to roughly $70 billion. Germany's ageing population, combined with high unemployment, has pushed social security outlays to a level exceeding contributions from workers. Structural rigidities in the labor market - including strict regulations on laying off workers and the setting of wages on a national basis - have made unemployment a chronic problem. ”

“ Economy - overview: Half the population still depends on agriculture and livestock for a livelihood, even though most of the nomads and many subsistence farmers were forced into the cities by recurrent droughts in the 1970s and 1980s. Mauritania has extensive deposits of iron ore, which account for half of total exports. The decline in world demand for this ore, however, has led to cutbacks in production. The nation's coastal waters are among the richest fishing areas in the world, but overexploitation by foreigners threatens this key source of revenue. ”

“ Offshore banking, manufacturing, and tourism are key sectors of the economy. The government's policy of offering incentives to high-technology companies and financial institutions to locate on the island has paid off in expanding employment opportunities in high-income industries. As a result, agriculture and fishing, once the mainstays of the economy, have declined in their shares of GDP. Trade is mostly with the UK. The Isle of Man enjoys free access to EU markets. ”

“ In 2001, with its 1.27 billion people but a GDP of just $4,300 per capita, China stood as the second largest economy in the world after the US (measured on a purchasing power parity basis) . Agriculture and industry have posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment has helped spur output of both domestic and export goods. On the darker side, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy and lassitude) and of capitalism (windfall gains and growing income disparities) . ”

“ The current government has lowered income taxes and introduced measures to boost employment, but has done little to reform an overly expensive pension system, rigid labor market, and restrictive bureaucracy that discourage hiring and make the tax burden one of the highest in Europe. In addition to the tax burden, the reduction of the workweek to 35 hours, which is to be extended to small firms in 2002, has drawn criticism for lowering the competitiveness of French businesses. The current economic slowdown has thrown the government's goal of balancing the budget by 2004 off track. ”

“ Tourism now is Cambodia's fastest growing industry, with arrivals up 34% in 2000 and up another 40% in 2001 before the September 11 terrorist attacks in the US. The long-term development of the economy after decades of war remains a daunting challenge. The population lacks education and productive skills, particularly in the poverty-ridden countryside, which suffers from an almost total lack of basic infrastructure. Fear of renewed political instability and corruption within the government discourage foreign investment and delay foreign aid. ”

“ Agriculture consists largely of subsistence farming and animal husbandry. Rugged mountains dominate the terrain and make the building of roads and other infrastructure difficult and expensive. The economy is closely aligned with India's through strong trade and monetary links. The industrial sector is technologically backward, with most production of the cottage industry type. Most development projects, such as road construction, rely on Indian migrant labor. Bhutan's hydropower potential and its attraction for tourists are key resources. ”

“ Kyrgyzstan has been one of the most progressive countries of the former Soviet Union in carrying out market reforms. With fits and starts, inflation has been lowered to an estimated 7% in 2001. Much of the government's stock in enterprises has been sold. Drops in production had been severe since the breakup of the Soviet Union in December 1991, but by mid-1995 production began to recover and exports began to increase. Growth was held down to 2.1% in 1998 largely because of the spillover from Russia's economic difficulties, but moved ahead to 3.6% in 1999, 5% in 2000, and 5% again in 2001. ”

“ Before the dissolution of Yugoslavia, the Republic of Croatia, after Slovenia, was the most prosperous and industrialized area, with a per capita output perhaps one-third above the Yugoslav average. The economy emerged from its mild recession in 2000 with tourism the main factor, but massive structural unemployment remains a key negative element. The government's failure to press the economic reforms needed to spur growth is largely the result of coalition politics and public resistance, particularly from the trade unions, to measures that would cut jobs, wages, or social benefits. ”

“ Economy - overview: Subsistence agriculture, together with forestry, remains the backbone of the economy of the Central African Republic (CAR) , with more than 70% of the population living in outlying areas. The agricultural sector generates half of GDP. Timber has accounted for about 16% of export earnings and the diamond industry for 54%. Important constraints to economic development include the CAR's landlocked position, a poor transportation system, a largely unskilled work force, and a legacy of misdirected macroeconomic policies. ”

“ Unemployment is gradually declining as job creation continues in the rebounding economy; inflation is up to 4.7% but still moderate. The EU put the Czech Republic just behind Poland and Hungary in preparations for accession, which will give further impetus and direction to structural reform. Moves to complete banking, telecommunications, and energy privatization will add to foreign investment, while intensified restructuring among large enterprises and banks and improvements in the financial sector should strengthen output growth. ”

“ Business and income tax cuts introduced in 2001 did not spare Germany from the impact of the downturn in international trade, and domestic demand faltered as unemployment began to rise. The government expects growth to gain pace in the second half of 2002, but to fall short of 1% for the year again. Corporate restructuring and growing capital markets are setting the foundations that could allow Germany to meet the long-term challenges of European economic integration and globalization, particularly if labor market rigidities are addressed. ”

“ Although the country has long been viewed primarily as an exporter of sugar, coffee, and tobacco, in recent years the service sector has overtaken agriculture as the economy's largest employer, due to growth in tourism and free trade zones. The country suffers from marked income inequality; the poorest half of the population receives less than one-fifth of GNP, while the richest 10% enjoy 40% of national income. ”

“ As Europe's largest economy and most populous nation, Germany remains a key member of the continent's economic, political, and defense organizations. European power struggles immersed the country in two devastating World Wars in the first half of the 20th century and left the country occupied by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945. ”

“ The socialist-oriented economy depends primarily upon revenues from the oil sector, which contributes practically all export earnings and about one-quarter of GDP. These oil revenues and a small population give Libya one of the highest per capita GDPs in Africa, but little of this income flows down to the lower orders of society. Import restrictions and inefficient resource allocations have led to periodic shortages of basic goods and foodstuffs. ”

“ Major impediments to growth include frequent cyclones and floods, inefficient state-owned enterprises, inadequate port facilities, a rapidly growing labor force that cannot be absorbed by agriculture, delays in exploiting energy resources (natural gas) , insufficient power supplies, and slow implementation of economic reforms. Economic reform is stalled in many instances by political infighting and corruption at all levels of government. Progress also has been blocked by opposition from the bureaucracy, public sector unions, and other vested interest groups. ”