Chapter M: Major infectious diseases (136)

Sao Tome and Principe
This small, poor island economy has become
increasingly dependent on cocoa since independence in 1975. Cocoa
production has substantially declined in recent years because of
drought and mismanagement. Sao Tome and Principe has to import all
fuels, most manufactured goods, consumer goods, and a substantial
amount of food. Over the years, it has had difficulty servicing its
external debt and has relied heavily on concessional aid and debt
rescheduling. Sao Tome and Principe benefited from $200 million in
debt relief in December 2000 under the Highly Indebted Poor
Countries (HIPC) program, which helped bring down the country's $300
million debt burden. In August 2005, the government signed on to a
new 3-year IMF Poverty Reduction and Growth Facility (PRGF) program
worth $4.3 million. Considerable potential exists for development of
a tourist industry, and the government has taken steps to expand
facilities in recent years. The government also has attempted to
reduce price controls and subsidies. Potential exists for the
development of petroleum resources in Sao Tome and Principe's
territorial waters in the oil-rich Gulf of Guinea, which are being
jointly developed in a 60-40 split with Nigeria, but any actual
production is at least several years off. The first production
licenses were sold in 2004, though a dispute over licensing with
Nigeria delayed the country's receipt of more than $20 million in
signing bonuses for almost a year.

Saudi Arabia
Saudi Arabia has an oil-based economy with strong
government controls over major economic activities. It possesses
about 20% of the world's proven petroleum reserves, ranks as the
largest exporter of petroleum, and plays a leading role in OPEC. The
petroleum sector accounts for roughly 80% of budget revenues, 45% of
GDP, and 90% of export earnings. Saudi Arabia is encouraging the
growth of the private sector in order to diversify its economy and
to employ more Saudi nationals. Diversification efforts are focusing
on power generation, telecommunications, natural gas exploration,
and petrochemical sectors. Almost 6 million foreign workers play an
important role in the Saudi economy, particularly in the oil and
service sectors, while Riyadh is struggling to reduce unemployment
among its own nationals. Saudi officials are particularly focused on
employing its large youth population, which generally lacks the
education and technical skills the private sector needs. Riyadh has
substantially boosted spending on job training and education, most
recently with the opening of the King Abdallah University of Science
and Technology - Saudi Arabia's first co-educational university. As
part of its effort to attract foreign investment, Saudi Arabia
acceded to the WTO in December 2005 after many years of
negotiations. The government has begun establishing six "economic
cities" in different regions of the country to promote foreign
investment and plans to spend $373 billion between 2010 and 2014 on
social development and infrastructure projects to advance Saudi
Arabia's economic development.

Senegal
Senegal relies heavily on donor assistance. The country's
key export industries are phosphate mining, fertilizer production,
and commercial fishing. The country is also working on iron ore and
oil exploration projects. In January 1994, Senegal undertook a bold
and ambitious economic reform program with the support of the
international donor community. Government price controls and
subsidies have been steadily dismantled. After seeing its economy
contract by 2.1% in 1993, Senegal made an important turnaround,
thanks to the reform program, with real growth in GDP averaging over
5% annually during 1995-2008. Annual inflation had been pushed down
to the single digits. The country was adversely affected by the
global economic downturn in 2009 and GDP growth fell below 2%. As a
member of the West African Economic and Monetary Union (WAEMU),
Senegal is working toward greater regional integration with a
unified external tariff and a more stable monetary policy. High
unemployment, however, continues to prompt illegal migrants to flee
Senegal in search of better job opportunities in Europe. Under the
IMF's Highly Indebted Poor Countries (HIPC) debt relief program,
Senegal benefited from eradication of two-thirds of its bilateral,
multilateral, and private-sector debt. In 2007, Senegal and the IMF
agreed to a new, non-disbursing, Policy Support Initiative program
which was completed in 2010. Senegal received its first disbursement
from the $540 million Millennium Challenge Account compact it signed
in September 2009 for infrastructure and agriculture development. In
2010, the Senegalese people protested against frequent power cuts.
The government pledged to expand capacity by 2012 and to promote
renewable energy but until Senegal has more capacity, more protests
are likely and economic activity will be hindered. During the year,
bakers protested government price controls on bread. Foreign
investment in Senegal is constrained by Senegal's business
environment, which has slipped in recent years, and by perceptions
of corruption.

Serbia
MILOSEVIC-era mismanagement of the economy, an extended
period of international economic sanctions, and the damage to
Yugoslavia's infrastructure and industry during the NATO airstrikes
in 1999 left the economy only half the size it was in 1990. After
the ousting of former Federal Yugoslav President MILOSEVIC in
September 2000, the Democratic Opposition of Serbia (DOS) coalition
government implemented stabilization measures and embarked on a
market reform program. After renewing its membership in the IMF in
December 2000, Yugoslavia continued to reintegrate into the
international community by rejoining the World Bank (IBRD) and the
European Bank for Reconstruction and Development (EBRD). Belgrade
has made progress in trade liberalization and enterprise
restructuring and privatization, including telecommunications and
small- and medium-size firms. It has made some progress towards EU
membership, signing a Stabilization and Association Agreement with
Brussels in May 2008, and with full implementation of the Interim
Trade Agreement with the EU in February 2010. Serbia is also
pursuing membership in the World Trade Organization. Reforms needed
to ensure the country's long-term viability have largely stalled
since the onset of the global financial crisis. Serbia is grappling
with fallout from crisis, which has led to a sharp drop in exports
to Western Europe and a decline in manufacturing output.
Unemployment and limited export earnings remain ongoing political
and economic problems. Serbia signed an augmented $4 billion Stand
By Arrangement with the IMF in May 2009. IMF conditions on Serbia
constrain the use of stimulus efforts to revive the economy, while
Serbia's concerns about inflation and exchange rate stability
preclude the use of expansionary monetary policy. Serbia's economy
grew by 1.8% in 2010 after a 3% contraction in 2009 as a recovery in
Western Europe began.

Seychelles
Since independence in 1976, per capita output in this
Indian Ocean archipelago has expanded to roughly seven times the
pre-independence, near-subsistence level, moving the island into the
upper-middle income group of countries. Growth has been led by the
tourist sector, which employs about 30% of the labor force and
provides more than 70% of hard currency earnings, and by tuna
fishing. In recent years, the government has encouraged foreign
investment to upgrade hotels and other services. At the same time,
the government has moved to reduce the dependence on tourism by
promoting the development of farming, fishing, and small-scale
manufacturing. GDP grew about 7-8% per year in 2006-07, driven by
tourism and a boom in tourism-related construction. The Seychelles
rupee was allowed to depreciate in 2006 after being overvalued for
years and fell by 10% in the first 9 months of 2007. Despite these
actions, the Seychelles economy has struggled to maintain its gains
and in 2008 suffered from food and oil price shocks, a foreign
exchange shortage, high inflation, large financing gaps, and the
global recession. In July 2008 the government defaulted on a Euro
amortizing note worth roughly US$80 million, leading to a
downgrading of Seychelles credit rating, but in October 2010 the EU
approved a $2.9 million grant as part of a larger four-year program
for Seychelles. In response to Seychelles successful implementation
of tighter monetary and fiscal policies, the IMF upgraded Seychelles
to a three-year exteneded fund facility (EFF) of $31 million in
December 2009. In 2008, GDP fell more than 1% due to declining
tourism, but the economy recovered in 2009-10 with a notable
increase in tourist numbers for 2010.

Sierra Leone
Sierra Leone is an extremely poor nation with
tremendous inequality in income distribution. While it possesses
substantial mineral, agricultural, and fishery resources, its
physical and social infrastructure has yet to recover from the civil
war, and serious social disorders continue to hamper economic
development. Nearly half of the working-age population engages in
subsistence agriculture. Manufacturing consists mainly of the
processing of raw materials and of light manufacturing for the
domestic market. Alluvial diamond mining remains the major source of
hard currency earnings accounting for nearly half of Sierra Leone's
exports. The fate of the economy depends upon the maintenance of
domestic peace and the continued receipt of substantial aid from
abroad, which is essential to offset the severe trade imbalance and
supplement government revenues. The IMF has completed a Poverty
Reduction and Growth Facility program that helped stabilize economic
growth and reduce inflation and in 2010 approved a new program worth
$45 million over three years. Political stability has led to a
revival of economic activity such as the rehabilitation of bauxite
and rutile mining, which are set to benefit from planned tax
incentives. A number of offshore oil discoveries were announced in
2009 and 2010. The development on these reserves, which could be
significant, is still several years away.

Singapore
Singapore has a highly developed and successful
free-market economy. It enjoys a remarkably open and corruption-free
environment, stable prices, and a per capita GDP higher than that of
most developed countries. The economy depends heavily on exports,
particularly in consumer electronics, information technology
products, pharmaceuticals, and on a growing financial services
sector. Real GDP growth averaged 6.9% between 2004 and 2008. The
economy contracted 1.3% in 2009 as a result of the global financial
crisis, but rebounded nearly 15% in 2010, on the strength of renewed
exports. Over the longer term, the government hopes to establish a
new growth path that focuses on raising productivity growth, which
has sunk to 1% per year in the last decade. Singapore has attracted
major investments in pharmaceuticals and medical technology
production and will continue efforts to establish Singapore as
Southeast Asia's financial and high-tech hub.

Sint Maarten
The economy of Sint Maarten centers around tourism with
nearly four-fifths of the labor force engaged in this sector. Over
one million visitors come to the island each year - 1.3 million in
2008 - with most arriving through the Princess Juliana International
Airport. Cruise ships and yachts also call on Sint Maarten's
numerous ports and harbors. No significant agriculture and limited
local fishing means that almost all food must be imported. Energy
resources and manufactured goods are also imported. Sint Maarten had
the highest per capita income among the five islands that formerly
comprised the Netherlands Antilles.

Slovakia
Slovakia has made significant economic reforms since its
separation from the Czech Republic in 1993. Reforms to the taxation,
healthcare, pension, and social welfare systems helped Slovakia to
consolidate its budget and get on track to join the EU in 2004 and
to adopt the euro in January 2009. Major privatizations are nearly
complete, the banking sector is almost entirely in foreign hands,
and the government has helped facilitate a foreign investment boom
with business friendly policies such as labor market liberalization
and a 19% flat tax. Foreign investment in the automotive and
electronic sectors has been strong. Slovakia's economic growth
exceeded expectations in 2001-08 despite the general European
slowdown. Unemployment, at an unacceptable 18% in 2003-04, dropped
to 7.7% in 2008 but remains the economy's Achilles heel. FICO's
cabinet was careful to keep a lid on spending in order to meet euro
adoption criteria and has focused on regulating energy and food
prices instead. To maintain a stable operating environment for
investors, the European Bank for Reconstruction and Development
advised the Slovak government to refrain from intervening in
important sectors of the economy. However, Bratislava's approach to
mitigating the economic slowdown has included substantial government
intervention and the option to nationalize strategic companies.
Slovakia was admitted to the euro zone in January 2009. RADICOVA's
government, in power since July 2010, has allowed the budget deficit
to rise slightly, to 8.2% of GDP in 2010. GDP fell nearly 5% in 2009
before gaining back 4% in 2010, and unemployment rose above 12% in
2010, as the global recession impacted many segments of the economy.

Slovenia
Slovenia became the first 2004 European Union entrant to
adopt the euro (on 1 January 2007) and has become a model of
economic success and stability for the region. With the highest per
capita GDP in Central Europe, Slovenia has excellent infrastructure,
a well-educated work force, and a strategic location between the
Balkans and Western Europe. Privatization has lagged since 2002, and
the economy has one of highest levels of state control in the EU.
Structural reforms to improve the business environment have allowed
for somewhat greater foreign participation in Slovenia's economy and
have helped to lower unemployment. In March 2004, Slovenia became
the first transition country to graduate from borrower status to
donor partner at the World Bank. In December 2007, Slovenia was
invited to begin the accession process for joining the OECD. Despite
its economic success, foreign direct investment (FDI) in Slovenia
has lagged behind the region average, and taxes remain relatively
high. Furthermore, the labor market is often seen as inflexible, and
legacy industries are losing sales to more competitive firms in
China, India, and elsewhere. In 2009, the world recession caused the
economy to contract - through falling exports and industrial
production - by more than 8%, and unemployment to rise above 9%.
Although growth resumed in 2010, the unemployment rate continued to
rise, topping 10%.

Solomon Islands
The bulk of the population depends on agriculture,
fishing, and forestry for at least part of its livelihood. Most
manufactured goods and petroleum products must be imported. The
islands are rich in undeveloped mineral resources such as lead,
zinc, nickel, and gold. Prior to the arrival of RAMSI, severe ethnic
violence, the closing of key businesses, and an empty government
treasury culminated in economic collapse. RAMSI's efforts to restore
law and order and economic stability have led to modest growth as
the economy rebuilds.

Somalia
Despite the lack of effective national governance, Somalia
has maintained a healthy informal economy, largely based on
livestock, remittance/money transfer companies, and
telecommunications. Agriculture is the most important sector with
livestock normally accounting for about 40% of GDP and more than 50%
of export earnings. Nomads and semi-pastoralists, who are dependent
upon livestock for their livelihood, make up a large portion of the
population. Livestock, hides, fish, charcoal, and bananas are
Somalia's principal exports, while sugar, sorghum, corn, qat, and
machined goods are the principal imports. Somalia's small industrial
sector, based on the processing of agricultural products, has
largely been looted and the machinery sold as scrap metal. Somalia's
service sector also has grown. Telecommunication firms provide
wireless services in most major cities and offer the lowest
international call rates on the continent. In the absence of a
formal banking sector, money transfer/remittance services have
sprouted throughout the country, handling up to $1.6 billion in
remittances annually. Mogadishu's main market offers a variety of
goods from food to the newest electronic gadgets. Hotels continue to
operate and are supported with private-security militias. Due to
armed attacks on and threats to humanitarian aid workers, the World
Food Programme partially suspended its operations in southern
Somalia in early January 2010 pending improvement in the security
situation. Somalia's arrears to the IMF have continued to grow.

South Africa
South Africa is a middle-income, emerging market with
an abundant supply of natural resources; well-developed financial,
legal, communications, energy, and transport sectors; a stock
exchange that is the 18th largest in the world; and modern
infrastructure supporting a relatively efficient distribution of
goods to major urban centers throughout the region. At the end of
2007, South Africa began to experience an electricity crisis. State
power supplier Eskom encountered problems with aged plants,
necessitating "load-shedding" cuts to residents and businesses in
the major cities. Growth was robust from 2004 to 2007 as South
Africa reaped the benefits of macroeconomic stability and a global
commodities boom, but began to slow in the second half of 2007 due
to the electricity crisis and the subsequent global financial
crisis' impact on commodity prices and demand. GDP fell nearly 2% in
2009. Unemployment remains high and outdated infrastructure has
constrained growth. Daunting economic problems remain from the
apartheid era - especially poverty, lack of economic empowerment
among the disadvantaged groups, and a shortage of public
transportation. South Africa's former economic policy was fiscally
conservative, focusing on controlling inflation, and attaining a
budget surplus. The current government largely follows the same
prudent policies, but must contend with the impact of the global
crisis and is facing growing pressure from special interest groups
to use state-owned enterprises to deliver basic services to
low-income areas and to increase job growth. More than one-quarter
of South Africa's population currently receives social grants.

South Georgia and South Sandwich Islands
Some fishing takes place in
adjacent waters. There is a potential source of income from
harvesting finfish and krill. The islands receive income from
postage stamps produced in the UK, sale of fishing licenses, and
harbor and landing fees from tourist vessels. Tourism from
specialized cruise ships is increasing rapidly.

Southern Ocean
Fisheries in 2006-07 landed 126,976 metric tons, of
which 82% (104,586 tons) was krill (Euphausia superba) and 9.5%
(12,027 tons) Patagonian toothfish (Dissostichus eleginoides - also
known as Chilean sea bass), compared to 127,910 tons in 2005-06 of
which 83% (106,591 tons) was krill and 9.7% (12,396 tons) Patagonian
toothfish (estimated fishing from the area covered by the Convention
of the Conservation of Antarctic Marine Living Resources (CCAMLR),
which extends slightly beyond the Southern Ocean area).
International agreements were adopted in late 1999 to reduce
illegal, unreported, and unregulated fishing, which in the 2000-01
season landed, by one estimate, 8,376 metric tons of Patagonian and
Antarctic toothfish. In the 2007-08 Antarctic summer, 45,213
tourists visited the Southern Ocean, compared to 35,552 in
2006-2007, and 29,799 in 2005-2006 (estimates provided to the
Antarctic Treaty by the International Association of Antarctica Tour
Operators (IAATO), and does not include passengers on overflights
and those flying directly in and out of Antarctica).

Spain
Spain's mixed capitalist economy is the 12th largest in the
world, and its per capita income roughly matches that of Germany and
France. However, after almost 15 years of above average GDP growth,
the Spanish economy began to slow in late 2007 and entered into a
recession in the second quarter of 2008. GDP contracted by 3.7% in
2009, ending a 16-year growth trend, and by another 0.4% in 2010,
making Spain the last major economy to emerge from the global
recession. The reversal in Spain's economic growth reflects a
significant decline in the construction sector, an oversupply of
housing, falling consumer spending, and slumping exports. Government
efforts to boost the economy through stimulus spending, extended
unemployment benefits, and loan guarantees did not prevent a sharp
rise in the unemployment rate, which rose from a low of about 8% in
2007 to 20% in 2010. The government budget deficit worsened from
3.8% of GDP in 2008 to about 9.7% of GDP in 2010, more than three
times the euro-zone limit. Spain's large budget deficit and poor
economic growth prospects have made it vulnerable to financial
contagion from other highly-indebted euro zone members despite the
government's efforts to cut spending, privatize industries, and
boost competitiveness through labor market reforms. Spanish banks'
high exposure to the collapsed domestic construction and real estate
market also poses a continued risk for the sector. The government
intervened in one regional savings bank in 2009, and investors
remain concerned that Madrid may need to bail out more troubled
banks. The Bank of Spain, however, is seeking to boost confidence in
the financial sector by pressuring banks to come clean about their
losses and consolidate into stronger groups.

Spratly Islands
Economic activity is limited to commercial fishing.
The proximity to nearby oil- and gas-producing sedimentary basins
suggests the potential for oil and gas deposits, but the region is
largely unexplored. There are no reliable estimates of potential
reserves. Commercial exploitation has yet to be developed.

Sri Lanka
Sri Lanka is engaging in large-scale reconstruction and
development projects following the end of the 26-year conflict with
the LTTE, including increasing electricity access and rebuilding its
road and rail network. Additionally, Sri Lanka seeks to reduce
poverty by using a combination of state directed policies and
private investment promotion to spur growth in disadvantaged areas,
develop small and medium enterprises, and promote increased
agriculture, High levels of government funding may be difficult, as
the government already is faced with high debt interest payments, a
bloated civil service, and historically high budget deficits. The
2008-09 global financial crisis and recession exposed Sri Lanka's
economic vulnerabilities and nearly caused a balance of payments
crisis, which was alleviated by a $2.6 billion IMF standby agreement
in July 2009. The end of the civil war and the IMF loan, however,
have largely restored investors' confidence, reflected in part by
the Sri Lankan stock market's recognition as one of the best
performing markets in the world. Sri Lankan growth rates averaged
nearly 5% in during the war, but increased government spending on
development and fighting the LTTE in the final years spurred GDP
growth to around 6-7% per year in 2006-08. After experiencing 3.5%
growth in 2009, Sri Lanka's economy is poised to achieve high growth
rates in the postwar period.

Sudan
Since 1997, Sudan has been working with the IMF to implement
macroeconomic reforms including a managed float of the exchange rate
and a large reserve of foreign exchange. A new currency, the
Sudanese Pound, was introduced in January 2007 at an initial
exchange rate of $1.00 equals 2 Sudanese Pounds. Sudan began
exporting crude oil in the last quarter of 1999 and the economy
boomed on the back of increases in oil production, high oil prices,
and significant inflows of foreign direct investment until the
second half of 2008. The Darfur conflict, the aftermath of two
decades of civil war in the south, the lack of basic infrastructure
in large areas, and a reliance by much of the population on
subsistence agriculture ensure much of the population will remain at
or below the poverty line for years to come despite rapid rises in
average per capita income. Sudan's real GDP expanded by 5.2% during
2010, an improvement over 2009's 4.2% growth but significantly below
the more that 10% per year growth experienced prior to the global
financial crisis in 2006 and 2007. While the oil sector continues to
drive growth, services and utilities play an increasingly important
role in the economy with agriculture production remaining important
as it employs 80% of the work force and contributes a third of GDP.
In the lead up to the referendum on southern secession, scheduled in
January 2011, Sudan saw its currency depreciate considerably on the
black market with the Central Bank's official rate also losing value
as the Sudanese people started to hoard foreign currency. The
Central Bank of Sudan intervened heavily in the currency market to
defend the value of the pound and the Sudanese government introduced
a number of measures to restrain excess local demand for hard
currency, but uncertainty ahead of the referendum has meant that
foreign exchange remained in heavy demand as 2010 came to a close.

Suriname
The economy is dominated by the mining industry, with
exports of alumina, gold, and oil accounting for about 85% of
exports and 25% of government revenues, making the economy highly
vulnerable to mineral price volatility. In 2000, the government of
Ronald VENETIAAN, returned to office and inherited an economy with
inflation of over 100% and a growing fiscal deficit. He quickly
implemented an austerity program, raised taxes, attempted to control
spending, and tamed inflation. Economic growth reached about 6% in
2007 and 2008, owing to sizeable foreign investment in mining and
oil. Suriname has received aid for projects in the bauxite and gold
mining sectors from Netherlands, Belgium, and the European
Development Fund. The economy contracted in 2009, however, as
investment waned and the country earned less from its commodity
exports when global prices for most commodities fell. Trade picked
up, boosting Suriname's economic growth in 2010, but the
government's budget remained strained, with increased social
spending during last year's election. Suriname's economic prospects
for the medium term will depend on continued commitment to
responsible monetary and fiscal policies and to the introduction of
structural reforms to liberalize markets and promote competition.

Svalbard
Coal mining, tourism, and international research are the
major revenue sources on Svalbard. Coal mining is the dominant
economic activity and a treaty of 9 February 1920 gave the 41
signatories equal rights to exploit mineral deposits, subject to
Norwegian regulation. Although US, UK, Dutch, and Swedish coal
companies have mined in the past, the only companies still engaging
in this are Norwegian and Russian. The settlements on Svalbard are
essentially company towns. The Norwegian state-owned coal company
employs nearly 60% of the Norwegian population on the island, runs
many of the local services, and provides most of the local
infrastructure. There is also some hunting of seal, reindeer, and
fox.

Swaziland
In this small, landlocked economy, subsistence agriculture
occupies approximately 70% of the population. The manufacturing
sector has diversified since the mid-1980s. Sugar and wood pulp
remain important foreign exchange earners. In 2007, the sugar
industry increased efficiency and diversification efforts, in
response to a 17% decline in EU sugar prices. Mining has declined in
importance in recent years with only coal and quarry stone mines
remaining active. Surrounded by South Africa, except for a short
border with Mozambique, Swaziland is heavily dependent on South
Africa from which it receives more than nine-tenths of its imports
and to which it sends 60% of its exports. Swaziland's currency is
pegged to the South African rand, subsuming Swaziland's monetary
policy to South Africa. Customs duties from the Southern African
Customs Union (SACU) account for two-thirds of Swaziland's
government revenues, and worker remittances from South Africa
substantially supplement domestically earned income. Customs
revenues plummeted during the global economic crisis and Swaziland
has appealed to SACU for assistance. With an estimated 40%
unemployment rate, Swaziland's need to increase the number and size
of small and medium enterprises and attract foreign direct
investment is acute. Overgrazing, soil depletion, drought, and
sometimes floods persist as problems for the future. More than
one-fourth of the population needed emergency food aid in 2006-07
because of drought, and more than one-quarter of the adult
population has been infected by HIV/AIDS.

Sweden
Aided by peace and neutrality for the whole of the 20th
century, Sweden has achieved an enviable standard of living under a
mixed system of high-tech capitalism and extensive welfare benefits.
It has a modern distribution system, excellent internal and external
communications, and a skilled labor force. In September 2003,
Swedish voters turned down entry into the euro system concerned
about the impact on the economy and sovereignty. Timber, hydropower,
and iron ore constitute the resource base of an economy heavily
oriented toward foreign trade. Privately owned firms account for
about 90% of industrial output, of which the engineering sector
accounts for 50% of output and exports. Agriculture accounts for
little more than 1% of GDP and of employment. Until 2008, Sweden was
in the midst of a sustained economic upswing, boosted by increased
domestic demand and strong exports. This and robust finances offered
the center-right government considerable scope to implement its
reform program aimed at increasing employment, reducing welfare
dependence, and streamlining the state's role in the economy.
Despite strong finances and underlying fundamentals, the Swedish
economy slid into recession in the third quarter of 2008 and growth
continued downward in 2009 as deteriorating global conditions
reduced export demand and consumption. Strong exports of commodities
and a return to profitability by Sweden's banking sector drove the
strong rebound in 2010.

Switzerland
Switzerland is a peaceful, prosperous, and modern market
economy with low unemployment, a highly skilled labor force, and a
per capita GDP among the highest in the world. Switzerland's economy
benefits from a highly developed service sector, led by financial
services, and a manufacturing industry that specializes in
high-technology, knowledge-based production. The Swiss have brought
their economic practices largely into conformity with the EU's, in
order to enhance their international competitiveness, but some trade
protectionism remains, particularly for its small agricultural
sector. The global financial crisis and resulting economic downturn
put Switzerland in a recession in 2009 as global export demand
stalled. The Swiss National Bank during this period effectively
implemented a zero-interest rate policy in a bid to boost the
economy and prevent appreciation of the franc. Switzerland's economy
grew 2.8% in 2010, when Bern implemented a third fiscal stimulus
program, but its prized banking sector has recently faced
significant challenges. The country's largest banks suffered sizable
losses in 2008-09, leading its largest bank to accept a government
rescue deal in late 2008. Switzerland has also come under increasing
pressure from individual neighboring countries, the EU, the US, and
international institutions to reform its banking secrecy laws.
Consequently, the government agreed to conform to OECD regulations
on administrative assistance in tax matters, including tax evasion.
The government has renegotiated its double taxation agreements with
numerous countries, including the US, to incorporate the OECD
standard, and it is working with Germany and the UK to resolve
outsanding issues, particularly the possibility of imposing taxes on
bank deposits held by foreigners. Parliament passed the first five
double-taxation agreements, including that with the US, in March
2010, but the agreements are subject to public referendum. In 2009,
Swiss financial regulators ordered the country's largest bank to
reveal at Washington's behest the names of US account-holders
suspected of using the bank to commit tax fraud. These steps will
have a lasting impact on Switzerland's long history of bank secrecy.

Syria
Syrian economic growth slowed to 1.8% in 2009 as the global
economic crisis affected oil prices and the economies of Syria's key
export partners and sources of investment. Damascus has implemented
modest economic reforms in the past few years, including cutting
lending interest rates, opening private banks, consolidating all of
the multiple exchange rates, raising prices on some subsidized
items, most notably gasoline and cement, and establishing the
Damascus Stock Exchange - which began operations in 2009. In
addition, President ASAD signed legislative decrees to encourage
corporate ownership reform, and to allow the Central Bank to issue
Treasury bills and bonds for government debt. Nevertheless, the
economy remains highly controlled by the government. Long-run
economic constraints include declining oil production, high
unemployment, rising budget deficits, and increasing pressure on
water supplies caused by heavy use in agriculture, rapid population
growth, industrial expansion, and water pollution.

Taiwan
Taiwan has a dynamic capitalist economy with gradually
decreasing government guidance of investment and foreign trade. In
keeping with this trend, some large, state-owned banks and
industrial firms have been privatized. Exports, led by electronics
and machinery, generate about 70% of Taiwan's GDP growth, and have
provided the primary impetus for economic development. This heavy
dependence on exports makes the economy vulnerable to downturns in
world demand. In 2009, Taiwan's GDP fell by 1.9%, due primarily to a
20% year-on-year decline in exports. GDP grew more than 8% in 2010,
as exports returned to the level of previous years. Taiwan's
diplomatic isolation, low birth rate, and rapidly aging population
are major long-term challenges. Free trade agreements have
proliferated in East Asia over the past several years, but so far
Taiwan has been excluded from this greater economic integration,
largely for reasons of diplomacy. Taiwan's birth rate of only 1.2
child per woman is among the lowest in the world, raising the
prospect of future labor shortages, falling domestic demand, and
declining tax revenues. Taiwan's population is aging quickly, with
the number of people over 65 accounting for 10.8% of the island's
total population as of the end of 2009. The island runs a large
trade surplus, and its foreign reserves are the world's fourth
largest, behind China, Japan, and Russia. Since President MA
Ying-jeou took office in May 2008, cross-Strait economic ties have
increased significantly. Since 2005 China has overtaken the US to
become Taiwan's second-largest source of imports after Japan. China
is also the island's number one destination for foreign direct
investment. Taipei has focused much of its economic recovery effort
on improving cross-Strait economic integration. Three financial
memorandums of understanding, covering banking, securities, and
insurance, took effect in mid-January 2010, opening the island to
greater investments from the Mainland's financial firms and
institutional investors, and providing new opportunities for Taiwan
financial firms to operate in China. Taiwan and the mainland in June
2010 signed the landmark Economic Cooperation Framework Agreement
(ECFA), an agreement similar to a free-trade agreement deal that
will increase cross-Strait economic ties by lowering tariffs on a
number of goods. Taiwan's goverment has said that the ECFA will
serve as a stepping stone toward trade pacts with other regional
partners and announced the beginning of negotiations on such an
agreement with Singapore in August.

Tajikistan
Tajikistan has one of the lowest per capita GDPs among
the 15 former Soviet republics. Because of a lack of employment
opportunities in Tajikistan, nearly half of the labor force works
abroad, primarily in Russia and Kazakhstan, supporting families in
Tajikistan through remittances. The exact number of labor migrants
is unknown, but estimated at around 1 million. Less than 7% of the
land area is arable. Cotton is the most important crop, but this
sector is burdened with debt and obsolete infrastructure; moreover,
government has encouraged a gradual transition away from cotton and
towards food cultivation due to its concerns about feeding the
population. Mineral resources include silver, gold, uranium, and
tungsten. Industry consists only of a large aluminum plant,
hydropower facilities, and small obsolete factories mostly in light
industry and food processing. The civil war (1992-97) severely
damaged the already weak economic infrastructure and caused a sharp
decline in industrial and agricultural production. Tajikistan's
economic situation remains fragile due to uneven implementation of
structural reforms, corruption, weak governance, seasonal power
shortages, and the external debt burden. A debt restructuring
agreement was reached with Russia in December 2002, including a $250
million write-off of Tajikistan's $300 million debt. Completion of
the Sangtuda I hydropower dam - finished in 2009 with Russian
investment - and the Sangtuda II and Rogun dams will add
substantially to electricity output. If finished according to Tajik
plans, Rogun will be the world's tallest dam. The World Bank, in
2010, agreed to fund safety and feasibility studies for the Rogun
Dam. Favorable reports from these studies could increase investor
interest in the project, which has been stalled due to lack of
funding. Tajikistan has also received substantial infrastructure
development loans from the Chinese government to improve roads and
an electricity transmission network. To help increase north-south
trade, the US funded a $36 million bridge which opened in August
2007 and links Tajikistan and Afghanistan. While Tajikistan has
experienced steady economic growth since 1997, more than half of the
population continues to live in poverty. Economic growth reached
10.6% in 2004, but dropped below 8% in 2005-08, as the effects of
higher oil prices and then the international financial crisis began
to register - mainly in the form of lower prices for key export
commodities and lower remittances from Tajiks working abroad, due to
the global economic downturn. In 2009 GDP growth dropped to 3.4% as
a result of the world recession.

Tanzania
Tanzania is one of the world's poorest economies in terms
of per capita income, however, Tanzania average 7% GDP growth per
year between 2000 and 2008 on strong gold production and tourism.
The economy depends heavily on agriculture, which accounts for more
than one-fourth of GDP, provides 85% of exports, and employs about
60% of the work force. The World Bank, the IMF, and bilateral donors
have provided funds to rehabilitate Tanzania's aging economic
infrastructure, including rail and port infrastructure that are
important trade links for inland countries. Recent banking reforms
have helped increase private-sector growth and investment, and the
government has increased spending on agriculture to 7% of its
budget. Continued donor assistance and solid macroeconomic policies
supported a positive growth rate, despite the world recession. In
2008, Tanzania received the world's largest Millennium Challenge
Compact grant, worth $698 million. Dar es Salaam used fiscal
stimulus and loosened monitary policy to ease the impact of the
global recession. GDP growth in 2009-10 was a respectable 6% per
year due to high gold prices and increased production.

Thailand
With a well-developed infrastructure, a free-enterprise
economy, generally pro-investment policies, and strong export
industries, Thailand enjoyed solid growth from 2000 to 2008 -
averaging more than 4% per year - as it recovered from the Asian
financial crisis of 1997-98. Thai exports - mostly machinery and
electronic components, agricultural commodities, and jewelry -
continue to drive the economy, accounting for more than half of GDP.
The global financial crisis of 2008-09 severely cut Thailand's
exports, with most sectors experiencing double-digit drops. In 2009,
the economy contracted 2.2%. In 2010, Thailand's economy expanded
7.6%, its fastest pace since 1995, as exports rebounded from their
depressed 2009 level. Antigovernment protests during March-May and
the country's polarized political situation had - at most - a
temporary impact on business and consumer confidence. Although
tourism was hit hard during the protests, its quick recovery helped
boost consumer confidence to new highs. Moreover, business and
investor sentiment remained buoyant as Thailand's stock market grew
almost 5% during the three-month period. The economy probably will
continue to experience high grow well into 2011.

Timor-Leste
In late 1999, about 70% of the economic infrastructure
of Timor-Leste was laid waste by Indonesian troops and
anti-independence militias. Three hundred thousand people fled
westward. Over the next three years a massive international program,
manned by 5,000 peacekeepers (8,000 at peak) and 1,300 police
officers, led to substantial reconstruction in both urban and rural
areas. By the end of 2005, refugees had returned or had settled in
Indonesia. The country continues to face great challenges in
rebuilding its infrastructure, strengthening the civil
administration, and generating jobs for young people entering the
work force. The development of oil and gas resources in offshore
waters has greatly supplemented government revenues. This
technology-intensive industry, however, has done little to create
jobs for the unemployed because there are no production facilities
in Timor. Gas is piped to Australia. In June 2005, the National
Parliament unanimously approved the creation of a Petroleum Fund to
serve as a repository for all petroleum revenues and to preserve the
value of Timor-Leste's petroleum wealth for future generations. The
Fund held assets of US$5.3 billion as of October 2009. The economy
has been little impacted by the global financial crisis and
continues to recover strongly from the mid-2006 outbreak of violence
and civil unrest, which disrupted both private and public sector
economic activity. The government in 2008 resettled tens of
thousands of an estimated 100,000 internally displaced persons
(IDPs); most IDPs returned home by early 2009. The underlying
economic policy challenge the country faces remains how best to use
oil-and-gas wealth to lift the non-oil economy onto a higher growth
path and to reduce poverty.

Togo
This small, sub-Saharan economy suffers from anemic economic
growth and depends heavily on both commercial and subsistence
agriculture, which provides employment for 65% of the labor force.
Some basic foodstuffs must still be imported. Cocoa, coffee, and
cotton generate about 40% of export earnings with cotton being the
most important cash crop. Togo is the world's fourth-largest
producer of phosphate. The government's decade-long effort,
supported by the World Bank and the IMF, to implement economic
reform measures, encourage foreign investment, and bring revenues in
line with expenditures has moved slowly. Progress depends on follow
through on privatization, increased openness in government financial
operations, progress toward legislative elections, and continued
support from foreign donors. Togo is on track with its IMF Extended
Credit Facility and reached a HIPC debt relief completion point in
2010 at which 95% of the country's debt was forgiven. Economic
growth prospects remain marginal due to declining cotton production
and underinvestment in phosphate mining.

Tokelau
Tokelau's small size (three villages), isolation, and lack
of resources greatly restrain economic development and confine
agriculture to the subsistence level. The people rely heavily on aid
from New Zealand - about $10 million annually in 2008 and 2009 - to
maintain public services. New Zealand's support amounts to 80% of
Tokelau's recurrent government budget. An international trust fund,
currently worth nearly US$32 million, was established in 2004 to
provide Tokelau an independent source of revenue. The principal
sources of revenue come from sales of copra, postage stamps,
souvenir coins, and handicrafts. Money is also remitted to families
from relatives in New Zealand.

Tonga
Tonga has a small, open, South Pacific island economy. It has
a narrow export base in agricultural goods. Squash, vanilla beans,
and yams are the main crops. Agricultural exports, including fish,
make up two-thirds of total exports. The country must import a high
proportion of its food, mainly from New Zealand. The country remains
dependent on external aid and remittances from Tongan communities
overseas to offset its trade deficit. Tourism is the second-largest
source of hard currency earnings following remittances. Tonga had
39,000 visitors in 2006. The government is emphasizing the
development of the private sector, especially the encouragement of
investment, and is committing increased funds for health and
education. Tonga has a reasonably sound basic infrastructure and
well developed social services. High unemployment among the young, a
continuing upturn in inflation, pressures for democratic reform, and
rising civil service expenditures are major issues facing the
government.

Trinidad and Tobago
Trinidad and Tobago has earned a reputation as
an excellent investment site for international businesses and has
one of the highest growth rates and per capita incomes in Latin
America. Economic growth between 2000 and 2007 averaged slightly
over 8%, significantly above the regional average of about 3.7% for
that same period; however, GDP has slowed down since then and
contracted about 3.5% in 2009, before rising more than 2% in 2010.
Growth has been fueled by investments in liquefied natural gas
(LNG), petrochemicals, and steel. Additional petrochemical,
aluminum, and plastics projects are in various stages of planning.
Trinidad and Tobago is the leading Caribbean producer of oil and
gas, and its economy is heavily dependent upon these resources but
it also supplies manufactured goods, notably food products and
beverages, as well as cement to the Caribbean region. Oil and gas
account for about 40% of GDP and 80% of exports, but only 5% of
employment. The country is also a regional financial center, and
tourism is a growing sector, although it is not as important
domestically as it is to many other Caribbean islands. The economy
benefits from a growing trade surplus. The previous MANNING
administration benefited from fiscal surpluses fueled by the dynamic
export sector; however, declines in oil and gas prices have reduced
government revenues which will challenge the new government's
commitment to maintaining high levels of public investment.

Tunisia
Tunisia has a diverse economy, with important agricultural,
mining, tourism, and manufacturing sectors. Governmental control of
economic affairs while still heavy has gradually lessened over the
past decade with increasing privatization, simplification of the tax
structure, and a prudent approach to debt. Progressive social
policies also have helped raise living conditions in Tunisia
relative to the region. Real growth, which averaged almost 5% over
the past decade, declined to 4.6% in 2008 and to 3-4% in 2009-10
because of economic contraction and slowing of import demand in
Europe - Tunisia's largest export market. However, development of
non-textile manufacturing, a recovery in agricultural production,
and strong growth in the services sector somewhat mitigated the
economic effect of slowing exports. Tunisia will need to reach even
higher growth levels to create sufficient employment opportunities
for an already large number of unemployed as well as the growing
population of university graduates. The challenges ahead include:
privatizing industry, liberalizing the investment code to increase
foreign investment, improving government efficiency, reducing the
trade deficit, and reducing socioeconomic disparities in the
impoverished south and west.

Turkey
Turkey's economy is increasingly driven by its industry and
service sectors, although its traditional agriculture sector still
accounts for about 30% of employment. An aggressive privatization
program has reduced state involvement in basic industry, banking,
transport, and communication, and an emerging cadre of middle-class
entrepreneurs is adding a dynamism to the economy. Turkey's
traditional textiles and clothing clothing sectors still account for
one-third of industrial employment, despite stiff competition in
international markets that resulted from the end of the global quota
system. Other sectors, notably the automotive, construction, and
electronics industries, are rising in importance and have surpassed
textiles within Turkey's export mix. Oil began to flow through the
Baku-Tbilisi-Ceyhan pipeline in May 2006, marking a major milestone
that will bring up to 1 million barrels per day from the Caspian to
market. Several gas pipelines also are being planned to help move
Central Asian gas to Europe via Turkey, which will help address
Turkey's dependence on energy imports over the long term. After
Turkey experienced a severe financial crisis in 2001, Ankara adopted
financial and fiscal reforms as part of an IMF program. The reforms
strengthened the country's economic fundamentals and ushered in an
era of strong growth - averaging more than 6% annually until 2009,
when global economic conditions and tighter fiscal policy slowed
growth to 4.7%, reduced inflation to 6.5% - a 34-year low - and cut
the public sector debt-to-GPD ratio below 50%. Turkey's
well-regulated financial markets and banking system weathered the
global financial crisis and GDP rebounded strongly to 7.3% in 2010,
as exports returned to normal levels following the recession. The
economy, however, continues to be burdened by a high current account
deficit and remains dependent on often volatile, short-term
investment to finance its trade deficit. The stock value of FDI
stood at $174 billion at year-end 2010, but inflows have slowed
considerably in light of continuing economic turmoil in Europe, the
source of much of Turkey's FDI. Further economic and judicial
reforms and prospective EU membership are expected to boost Turkey's
attractiveness to foreign investors. However, Turkey's relatively
high current account deficit, uncertainty related to policy-making,
and fiscal imbalances leave the economy vulnerable to destabilizing
shifts in investor confidence.

Turkmenistan
Turkmenistan is largely a desert country with intensive
agriculture in irrigated oases and sizeable gas and oil resources.
The two largest crops are cotton, most of which is produced for
export, and wheat, which is domestically consumed. Although
agriculture accounts for roughly 10% of GDP, it continues to employ
nearly half of the country's workforce. With an authoritarian
ex-Communist regime in power and a tribally based social structure,
Turkmenistan has taken a cautious approach to economic reform,
hoping to use gas and cotton export revenues to sustain its
inefficient economy. Privatization goals remain limited. From
1998-2005, Turkmenistan suffered from the continued lack of adequate
export routes for natural gas and from obligations on extensive
short-term external debt. At the same time, however, total exports
rose by an average of roughly 15% per year from 2003-08, largely
because of higher international oil and gas prices. New pipelines to
China and Iran, that began operation in late 2009 and early 2010,
have given Turkmenistan additional export routes for its gas,
although these new routes have not offset the sharp drop in export
revenue since early 2009 from decreased gas exports to Russia.
Overall prospects in the near future are discouraging because of
widespread internal poverty, endemic corruption, a poor educational
system, government misuse of oil and gas revenues, and Ashgabat's
reluctance to adopt market-oriented reforms. In the past,
Turkmenistan's economic statistics were state secrets. The new
government has established a State Agency for Statistics, but GDP
numbers and other figures are subject to wide margins of error. In
particular, the rate of GDP growth is uncertain. Since his election,
President BERDIMUHAMEDOW unified the country's dual currency
exchange rate, ordered the redenomination of the manat, reduced
state subsidies for gasoline, and initiated development of a special
tourism zone on the Caspian Sea. Although foreign investment is
encouraged, numerous bureaucratic obstacles impede international
business activity.

Turks and Caicos Islands
The Turks and Caicos economy is based on
tourism, offshore financial services, and fishing. Most capital
goods and food for domestic consumption are imported. The US is the
leading source of tourists, accounting for more than three-quarters
of the 175,000 visitors that arrived in 2004. Major sources of
government revenue also include fees from offshore financial
activities and customs receipts.

Tuvalu
Tuvalu consists of a densely populated, scattered group of
nine coral atolls with poor soil. The country has no known mineral
resources and few exports and is almost entirely dependent upon
imported food and fuel. Subsistence farming and fishing are the
primary economic activities. Fewer than 1,000 tourists, on average,
visit Tuvalu annually. Job opportunities are scarce and public
sector workers make up most of those employed. About 15% of the
adult male population work as seamen on merchant ships abroad, and
remittances are a vital source of income contributing around $2
million in 2007. Substantial income is received annually from the
Tuvalu Trust Fund (TTF) an international trust fund established in
1987 by Australia, NZ, and the UK and supported also by Japan and
South Korea. Thanks to wise investments and conservative
withdrawals, this fund grew from an initial $17 million to an
estimated value of $77 million in 2006. The TTF contributed nearly
$9 million towards the government budget in 2006 and is an important
cushion for meeting shortfalls in the government's budget. The US
Government is also a major revenue source for Tuvalu because of
payments from a 1988 treaty on fisheries. In an effort to ensure
financial stability and sustainability, the government is pursuing
public sector reforms, including privatization of some government
functions and personnel cuts. Tuvalu also derives royalties from the
lease of its ".tv" Internet domain name with revenue of more than $2
million in 2006. A minor source of government revenue comes from the
sale of stamps and coins. With merchandise exports only a fraction
of merchandise imports, continued reliance must be placed on fishing
and telecommunications license fees, remittances from overseas
workers, official transfers, and income from overseas investments.
Growing income disparities and the vulnerability of the country to
climatic change are among leading concerns for the nation.

Uganda
Uganda has substantial natural resources, including fertile
soils, regular rainfall, small deposits of copper, gold, and other
minerals, and recently discovered oil. Uganda has never conducted a
national minerals survey. Agriculture is the most important sector
of the economy, employing over 80% of the work force. Coffee
accounts for the bulk of export revenues. Since 1986, the government
- with the support of foreign countries and international agencies -
has acted to rehabilitate and stabilize the economy by undertaking
currency reform, raising producer prices on export crops, increasing
prices of petroleum products, and improving civil service wages. The
policy changes are especially aimed at dampening inflation and
boosting production and export earnings. Since 1990 economic reforms
ushered in an era of solid economic growth based on continued
investment in infrastructure, improved incentives for production and
exports, lower inflation, better domestic security, and the return
of exiled Indian-Ugandan entrepreneurs. Uganda has received about $2
billion in multilateral and bilateral debt relief. In 2007 Uganda
received $10 million for a Millennium Challenge Account Threshold
Program. The global economic downturn has hurt Uganda's exports;
however, Uganda's GDP growth is still relatively strong due to past
reforms and sound management of the downturn. Oil revenues and taxes
will become a larger source of government funding as oil comes on
line in the next few years. Instability in southern Sudan is the
biggest risk for the Ugandan economy in 2011 because Uganda's main
export partner is Sudan and Uganda is a key destination for Sudanese
refugees.