• Antigua and Barbuda

    • Economy—overview: Antigua has a relatively high GDP per capita in comparison to most other Caribbean nations. It has experienced solid growth since 2003, driven by a construction boom in hotels and housing that which should wind down in 2008. Tourism continues to dominate the economy, accounting for more than half of GDP. The dual-island nation's agricultural production is focused on the domestic market and constrained by a limited water supply and a labor shortage stemming from the lure of higher wages in tourism and construction. Manufacturing comprises enclave-type assembly for export with major products being bedding, handicrafts, and electronic components. Prospects for economic growth in the medium term will continue to depend on income growth in the industrialized world, especially in the US, which accounts for slightly more than one-third of tourist arrivals. Since taking office in 2004, the SPENCER government has adopted an ambitious fiscal reform program, but will continue to be saddled by its debt burden with a debt-to-GDP ratio exceeding 100%.

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  • Argentina
    • Economy—overview: Argentina benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector, and a diversified industrial base. Although one of the world's wealthiest countries 100 years ago, Argentina suffered during most of the 20th century from recurring economic crises, persistent fiscal and current account deficits, high inflation, mounting external debt, and capital flight. A severe depression, growing public and external indebtedness, and a bank run culminated in 2001 in the most serious economic, social, and political crisis in the country's turbulent history. Interim President Adolfo RODRIGUEZ SAA declared a default - the largest in history - on the government's foreign debt in December of that year, and abruptly resigned only a few days after taking office. His successor, Eduardo DUHALDE, announced an end to the peso's decade-long 1-to-1 peg to the US dollar in early 2002. The economy bottomed out that year, with real GDP 18% smaller than in 1998 and almost 60% of Argentines under the poverty line. Real GDP rebounded to grow by an average 9% annually over the subsequent five years, taking advantage of previously idled industrial capacity and labor, an audacious debt restructuring and reduced debt burden, excellent international financial conditions, and expansionary monetary and fiscal policies. Inflation, however, reached double-digit levels in 2006 and the government of President Nestor KIRCHNER responded with "voluntary" price agreements with businesses, as well as export taxes and restraints. Multi-year price freezes on electricity and natural gas rates for residential users stoked consumption and kept private investment away, leading to restrictions on industrial use and blackouts in 2007.
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Bahamas
    • Economy—overview: The Bahamas is one of the wealthiest Caribbean countries with an economy heavily dependent on tourism and offshore banking. Tourism together with tourism-driven construction and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the archipelago's labor force. Steady growth in tourism receipts and a boom in construction of new hotels, resorts, and residences had led to solid GDP growth in recent years, but tourist arrivals have been on the decline since 2006. Financial services constitute the second-most important sector of the Bahamian economy and, when combined with business services, account for about 36% of GDP. However, since December 2000, when the government enacted new regulations on the financial sector, many international businesses have left The Bahamas. Manufacturing and agriculture combined contribute approximately a tenth of GDP and show little growth, despite government incentives aimed at those sectors. Overall growth prospects in the short run rest heavily on the fortunes of the tourism sector. Tourism, in turn, depends on growth in the US, the source of more than 80% of the visitors.
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  • Barbados
    • Economy—overview: Historically, the Barbadian economy was dependent on sugarcane cultivation and related activities. However, production in recent years has diversified into light industry and tourism, with about three-quarters of GDP and 80% of exports being attributed to services. Growth has rebounded since 2003, bolstered by increases in construction projects and tourism revenues - reflecting its success in the higher-end segment. The country enjoys one of the highest per capita incomes in the region and an investment grade rating which benefits from its political stability and stable institutions. Offshore finance and information services are important foreign exchange earners and thrive from having the same time zone as eastern US financial centers and a relatively highly educated workforce. The government continues its efforts to reduce unemployment, to encourage direct foreign investment, and to privatize remaining state-owned enterprises.
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  • Belize
    • Economy—overview: In this small, essentially private-enterprise economy, tourism is the number one foreign exchange earner followed by exports of marine products, citrus, cane sugar, bananas, and garments. The government's expansionary monetary and fiscal policies, initiated in September 1998, led to sturdy GDP growth averaging nearly 4% in 1999-2007. Oil discoveries in 2006 bolstered the economic growth in 2006 and 2007. Major concerns continue to be the sizable trade deficit and unsustainable foreign debt. In February 2007, the government restructured nearly all of its public external commercial debt, which will reduce interest payments and relieve liquidity concerns. A key short-term objective remains the reduction of poverty with the help of international donors.
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  • Bolivia
    • Economy—overview: Bolivia is one of the poorest and least developed countries in Latin America. Following a disastrous economic crisis during the early 1980s, reforms spurred private investment, stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-05 was characterized by political instability, racial tensions, and violent protests against plans - subsequently abandoned - to export Bolivia's newly discovered natural gas reserves to large northern hemisphere markets. In 2005, the government passed a controversial hydrocarbons law that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company, which was made the sole exporter of natural gas. The law also required that the state energy company regain control over the five companies that were privatized during the 1990s - a process that is still underway. In 2006, higher earnings for mining and hydrocarbons exports pushed the current account surplus to about 12% of GDP and the government's higher tax take produced a fiscal surplus after years of large deficits. Debt relief from the G8 - announced in 2005 - also has significantly reduced Bolivia's public sector debt burden. Private investment as a share of GDP, however, remains among the lowest in Latin America, and inflation reached double-digit levels in 2007.
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  • Brazil
    • Economy—overview: Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries and is expanding its presence in world markets. Having weathered 2001-03 financial turmoil, capital inflows are regaining strength and the currency has resumed appreciating. The appreciation has slowed export volume growth, but since 2004, Brazil's growth has yielded increases in employment and real wages. The resilience in the economy stems from commodity-driven current account surpluses, and sound macroeconomic policies that have bolstered international reserves to historically high levels, reduced public debt, and allowed a significant decline in real interest rates. A floating exchange rate, an inflation-targeting regime, and a tight fiscal policy are the three pillars of the economic program. From 2003 to 2007, Brazil ran record trade surpluses and recorded its first current account surpluses since 1992. Productivity gains coupled with high commodity prices contributed to the surge in exports. Brazil improved its debt profile in 2006 by shifting its debt burden toward real denominated and domestically held instruments. "LULA" DA SILVA restated his commitment to fiscal responsibility by maintaining the country's primary surplus during the 2006 election. Following his second inauguration, "LULA" DA SILVA announced a package of further economic reforms to reduce taxes and increase investment in infrastructure. The government's goal of achieving strong growth while reducing the debt burden is likely to create inflationary pressures.
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  • Chile
    • Economy—overview: Chile has a market-oriented economy characterized by a high level of foreign trade. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government. Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and because of lower export earnings - the latter a product of the global financial crisis. A severe drought exacerbated the recession in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years. Despite the effects of the recession, Chile maintained its reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Between 2000 and 2007 growth ranged between 2%-6%. Throughout these years Chile maintained a low rate of inflation with GDP growth coming from high copper prices, solid export earnings (particularly forestry, fishing, and mining), and growing domestic consumption. President BACHELET in 2006 established an Economic and Social Stabilization Fund to hold excess copper revenues so that social spending can be maintained during periods of copper shortfalls. This fund probably surpassed $20 billion at the end of 2007. Chile continues to attract foreign direct investment, but most foreign investment goes into gas, water, electricity and mining. Unemployment has exhibited a downward trend over the past two years, dropping to 7.8% and 7.0% at the end of 2006 and 2007, respectively. Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, which took effect on 1 January 2004. Chile claims to have more bilateral or regional trade agreements than any other country. It has 57 such agreements (not all of them full free trade agreements), including with the European Union, Mercosur, China, India, South Korea, and Mexico.
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  • Colombia
    • Economy—overview: Colombia's economy has experienced positive growth over the past five years despite a serious armed conflict. In fact, 2007 is regarded by policy makers and the private sector as one of the best economic years in recent history, after 2005. The economy continues to improve in part because of austere government budgets, focused efforts to reduce public debt levels, an export-oriented growth strategy, improved domestic security, and high commodity prices. Ongoing economic problems facing President URIBE include reforming the pension system, reducing high unemployment, and funding new exploration to offset declining oil production. The government's economic reforms and democratic security strategy, coupled with increased investment, have engendered a growing sense of confidence in the economy. However, the business sector continues to be concerned about failure of the US Congress to approve the signed FTA.
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  • Costa Rica
    • Economy—overview: Costa Rica's basically stable economy depends on tourism, agriculture, and electronics exports. Poverty has remained around 20% for nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Immigration from Nicaragua has increasingly become a concern for the government. The estimated 300,000-500,000 Nicaraguans estimated to be in Costa Rica legally and illegally are an important source of (mostly unskilled) labor, but also place heavy demands on the social welfare system. Foreign investors remain attracted by the country's political stability and high education levels, as well as the fiscal incentives offered in the free-trade zones. Exports have become more diversified in the past 10 years due to the growth of the high-tech manufacturing sector, which is dominated by the microprocessor industry. Tourism continues to bring in foreign exchange, as Costa Rica's impressive biodiversity makes it a key destination for ecotourism. The government continues to grapple with its large internal and external deficits and sizable internal debt. Reducing inflation remains a difficult problem because of rising import prices, labor market rigidities, and fiscal deficits. Tax and public expenditure reforms will be necessary to close the budget gap. In October 2007, a national referendum voted in favor of the US-Central American Free Trade Agreement (CAFTA).
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  • Cuba
    • Economy—overview: The government continues to balance the need for economic loosening against a desire for firm political control. It has rolled back limited reforms undertaken in the 1990s to increase enterprise efficiency and alleviate serious shortages of food, consumer goods, and services. The average Cuban's standard of living remains at a lower level than before the downturn of the 1990s, which was caused by the loss of Soviet aid and domestic inefficiencies. Since late 2000, Venezuela has been providing oil on preferential terms, and it currently supplies about 100,000 barrels per day of petroleum products. Cuba has been paying for the oil, in part, with the services of Cuban personnel in Venezuela, including some 20,000 medical professionals. In 2007, high metals prices continued to boost Cuban earnings from nickel and cobalt production. Havana continued to invest in the country's energy sector to mitigate electrical blackouts that had plagued the country since 2004.
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  • Dominica
    • Economy—overview: The Dominican economy depends on agriculture, primarily bananas, and remains highly vulnerable to climatic conditions and international economic developments. Tourism has increased as the government seeks to promote Dominica as an "ecotourism" destination. In 2003, the government began a comprehensive restructuring of the economy - including elimination of price controls, privatization of the state banana company, and tax increases - to address Dominica's economic and financial crisis of 2001-02 and to meet IMF targets. This restructuring paved the way for the current economic recovery - real growth for 2006 reached a two-decade high - and will help to reduce the debt burden, which remains at about 100% of GDP. In order to diversify the island's production base, the government is attempting to develop an offshore financial sector and is researching Dominica's capability to export geothermal energy.
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  • Dominican Republic
    • Economy—overview: The Dominican Republic has enjoyed strong GDP growth since 2005, with double digit growth in 2006. In 2007, exports were bolstered by the nearly 50% increase in nickel prices; however, prices are expected to fall in 2008, contributing to a slowdown in GDP growth for the year. 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 economy is highly dependent upon the US, the source of nearly three-fourths of exports, and remittances represent about a tenth of GDP, equivalent to almost half of exports and three-quarters of tourism receipts. With the help of strict fiscal targets agreed to in the 2004 renegotiation of an IMF standby loan, President FERNANDEZ has stabilized the country's financial situation, lowering inflation to less than 6%. A fiscal expansion is expected for 2008 prior to the elections in May and for Tropical Storm Noel reconstruction. Although the economy is growing at a respectable rate, high unemployment and underemployment remains an important challenge. The country suffers from marked income inequality; the poorest half of the population receives less than one-fifth of GNP, while the richest 10% enjoys nearly 40% of national income. The Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) came into force in March 2007, which should boost investment and exports and reduce losses to the Asian garment industry.
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  • Ecuador
    • Economy—overview: Ecuador is substantially dependent on its petroleum resources, which have accounted for more than half of the country's export earnings and one-fourth of public sector revenues in recent years. In 1999/2000, Ecuador suffered a severe economic crisis, with GDP contracted by more than 6%, with a significant increase in poverty. The banking system also collapsed, and Ecuador defaulted on its external debt later that year. In March 2000, Congress approved a series of structural reforms that also provided for the adoption of the US dollar as legal tender. Dollarization stabilized the economy, and positive growth returned in the years that followed, helped by high oil prices, remittances, and increased non-traditional exports. From 2002-06 the economy grew 5.5%, the highest five-year average in 25 years. The poverty rate declined but remained high at 38% in 2006. In 2006 the government of Alfredo PALACIO (2005-07) seized the assets of Occidental Petroleum for alleged contract violations and imposed a windfall revenue tax on foreign oil companies, leading to the suspension of free trade negotiations with the US. These measures, combined with chronic underinvestment in the state oil company, Petroecuador, led to a drop in petroleum production in 2007. PALACIO's successor, Rafael CORREA, raised the specter of debt default - but Ecuador has paid its debt on time. He also decreed a higher windfall revenue tax on private oil companies, then sought to renegotiate their contracts to overcome the debilitating effect of the tax. This generated economic uncertainty; private investment has dropped and economic growth has slowed significantly.
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  • El Salvador
    • Economy—overview: The smallest country in Central America, El Salvador has the third largest economy, but growth has been modest in recent years. Robust growth in non-traditional exports have offset declines in the maquila exports, while remittances and external aid offset the trade deficit from high oil prices and strong import demand for consumer and intermediate goods. El Salvador leads the region in remittances per capita with inflows equivalent to nearly all export income. Implementation in 2006 of the Central America-Dominican Republic Free Trade Agreement (CAFTA), which El Salvador was the first to ratify, has strengthened an already positive export trend. With the adoption of the US dollar as its currency in 2001, El Salvador lost control over monetary policy and must concentrate on maintaining a disciplined fiscal policy. The current government has pursued economic diversification, with some success in promoting textile production, international port services, and tourism through tax incentives. It is committed to opening the economy to trade and investment, and has embarked on a wave of privatizations extending to telecom, electricity distribution, banking, and pension funds. In late 2006, the government and the Millennium Challenge Corporation signed a five-year, $461 million compact to stimulate economic growth and reduce poverty in the country's northern region through investments in education, public services, enterprise development, and transportation infrastructure.
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  • Grenada
    • Economy—overview: Grenada relies on tourism as its main source of foreign exchange, especially since the construction of an international airport in 1985. Strong performances in construction and manufacturing, together with the development of an offshore financial industry, have also contributed to growth in national output. Grenada has rebounded from the devastating effects of Hurricanes Ivan (2004) and Emily (2005), but is now saddled with the debt burden from the rebuilding process. The agricultural sector, particularly nutmeg and cocoa cultivation, has gradually recovered, and the tourism sector has seen substantial increases in foreign direct investment as the regional share of the tourism market increases.
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  • Guatemala
    • Economy—overview: Guatemala is the most populous of the Central American countries with a GDP per capita roughly one-half that of Argentina, Brazil, and Chile. The agricultural sector accounts for about one-tenth of GDP, two-fifths of exports, and half of the labor force. Coffee, sugar, and bananas are the main products, with sugar exports benefiting from increased global demand for ethanol. The 1996 signing of peace accords, which ended 36 years of civil war, removed a major obstacle to foreign investment, and Guatemala since then has pursued important reforms and macroeconomic stabilization. On 1 July 2006, the Central American Free Trade Agreement (CAFTA) entered into force between the US and Guatemala and has since spurred increased investment in the export sector. The distribution of income remains highly unequal with about 56% of the population below the poverty line. Other ongoing challenges include increasing government revenues, negotiating further assistance from international donors, upgrading both government and private financial operations, curtailing drug trafficking and rampant crime, and narrowing the trade deficit. Given Guatemala's large expatriate community in the United States, it is the top remittance recipient in Central America, with inflows serving as a primary source of foreign income equivalent to nearly two-thirds of exports.
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  • Guyana
    • Economy—overview: The Guyanese economy exhibited moderate economic growth in 2001-07, based on expansion in the agricultural and mining sectors, a more favorable atmosphere for business initiatives, a more realistic exchange rate, fairly low inflation, and the continued support of international organizations. Economic recovery since the 2005 flood-related contraction has been buoyed by increases in remittances and foreign direct investment. Chronic problems include a shortage of skilled labor and a deficient infrastructure. The government is juggling a sizable external debt against the urgent need for expanded public investment. In March 2007, the Inter-American Development Bank, Guyana's principal donor, canceled Guyana's nearly $470 million debt, equivalent to nearly 48% of GDP. The bauxite mining sector should benefit in the near term from restructuring and partial privatization, and the state-owned sugar industry will conduct efficiency increasing modernizations. Export earnings from agriculture and mining have fallen sharply, while the import bill has risen, driven by higher energy prices. Guyana's entrance into the Caricom Single Market and Economy (CSME) in January 2006 will broaden the country's export market, primarily in the raw materials sector.
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  • Haiti
    • Economy—overview: Haiti is the poorest country in the Western Hemisphere, with 80% of the population living under the poverty line and 54% in abject poverty. Two-thirds of all Haitians depend on the agricultural sector, mainly small-scale subsistence farming, and remain vulnerable to damage from frequent natural disasters, exacerbated by the country's widespread deforestation. A macroeconomic program developed in 2005 with the help of the International Monetary Fund helped the economy grow 3.5% in 2007, the highest growth rate since 1999. US economic engagement under the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act, passed in December 2006, has boosted the garment and automotive parts exports and investment by providing tariff-free access to the US. Haiti suffers from high inflation, a lack of investment because of insecurity and limited infrastructure, and a severe trade deficit. In 2005, Haiti paid its arrears to the World Bank, paving the way for reengagement with the Bank. The government relies on formal international economic assistance for fiscal sustainability. Remittances are the primary source of foreign exchange, equaling nearly a quarter of GDP and more than twice the earnings from exports.
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  • Honduras
    • Economy—overview: Honduras, the second poorest country in Central America and one of the poorest countries in the Western Hemisphere, with an extraordinarily unequal distribution of income and massive unemployment, is banking on expanded trade under the US-Central America Free Trade Agreement (CAFTA) and on debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. Despite improvements in tax collections, the government's fiscal deficit is growing due to increases in current expenditures and financial losses from the state energy and telephone companies. Honduras is the fastest growing remittance destination in the region with inflows representing over a quarter of GDP, equivalent to nearly three-quarters of exports. The economy relies heavily on a narrow range of exports, notably bananas and coffee, making it vulnerable to natural disasters and shifts in commodity prices, however, investments in the maquila and non-traditional export sectors are slowly diversifying the economy. Growth remains dependent on the economy of the US, its largest trading partner, and on reduction of the high crime rate, as a means of attracting and maintaining investment.
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  • Jamaica
    • Economy—overview: The Jamaican economy is heavily dependent on services, which now account for more than 60% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina. Remittances account for nearly 20% of GDP and are equivalent to tourism revenues. Jamaica's economy, already saddled with a record of sluggish growth, will suffer an economic setback from damages caused by Hurricane Dean in August 2007. The economy faces serious long-term problems: high but declining interest rates, increased foreign competition, exchange rate instability, a sizable merchandise trade deficit, large-scale unemployment and underemployment, and a debt-to-GDP ratio of 135%. Jamaica's onerous debt burden - the fourth highest per capita - is the result of government bailouts to ailing sectors of the economy, most notably the financial sector in the mid-to-late 1990s. Inflation also has declined, standing at about 7% at the end of 2007. High unemployment exacerbates the serious crime problem, including gang violence that is fueled by the drug trade. The GOLDING administration faces the difficult prospect of having to achieve fiscal discipline in order to maintain debt payments while simultaneously attacking a serious and growing crime problem that is hampering economic growth.
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  • Nicaragua
    • Economy—overview: Nicaragua has widespread underemployment, one of the highest degrees of income inequality in the world, and the third lowest per capita income in the Western Hemisphere. While the country has progressed toward macroeconomic stability in the past few years, annual GDP growth has been far too low to meet the country's needs, forcing the country to rely on international economic assistance to meet fiscal and debt financing obligations. In early 2004, Nicaragua secured some $4.5 billion in foreign debt reduction under the Heavily Indebted Poor Countries (HIPC) initiative, and in October 2007, the IMF approved a new poverty reduction and growth facility (PRGF) program that should create fiscal space for social spending and investment. The continuity of a relationship with the IMF reinforces donor confidence, despite private sector concerns surrounding ORTEGA, which has dampened investment. 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. Energy shortages fueled by high oil prices, however, are a serious bottleneck to growth.
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  • Panama
    • Economy—overview: Panama's dollarized economy rests primarily on a well-developed services sector that accounts for two-thirds of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and should be completed by 2014 at a cost of $5.3 billion (about 30% of current GDP). The expansion project will more than double the Canal's capacity, enabling it to accommodate ships that are now too large to transverse the transoceanic crossway and should help to reduce the high unemployment rate. The government has implemented tax reforms, as well as social security reforms, and backs regional trade agreements and development of tourism. Not a CAFTA signatory, Panama in December 2006 independently negotiated a free trade agreement with the US, which, when implemented, will help promote the country's economic growth.
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  • Paraguay
    • Economy—overview: Landlocked Paraguay has a market economy marked by a large informal sector. This sector features both reexport of imported consumer goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis. On a per capita basis, real income has stagnated at 1980 levels. Most observers attribute Paraguay's poor economic performance to political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure. The economy rebounded between 2003 and 2007, posting modest growth each year, as growing world demand for commodities combined with high prices and favorable weather to support Paraguay's commodity-based export expansion.
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  • Peru
    • Economy—overview: Peru's economy reflects its varied geography - an arid coastal region, the Andes further inland, and tropical lands bordering Colombia and Brazil. Abundant mineral resources are found in the mountainous areas, and Peru's coastal waters provide excellent fishing grounds. However, overdependence on minerals and metals subjects the economy to fluctuations in world prices, and a lack of infrastructure deters trade and investment. After several years of inconsistent economic performance, the Peruvian economy grew by more than 4% per year during the period 2002-06, with a stable exchange rate and low inflation. Growth jumped to 7.5% in 2007, driven by higher world prices for minerals and metals. Risk premiums on Peruvian bonds on secondary markets reached historically low levels in late 2004, reflecting investor optimism regarding the government's prudent fiscal policies and openness to trade and investment. Despite the strong macroeconomic performance, underemployment and poverty have stayed persistently high. Growth prospects depend on exports of minerals, textiles, and agricultural products, and by expectations for the Camisea natural gas megaproject and for other promising energy projects. Upon taking office, President GARCIA announced Sierra Exportadora, a program aimed at promoting economic growth in Peru's southern and central highlands.
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  • Saint Kitts & Nevis
    • Economy—overview: Sugar was the traditional mainstay of the Saint Kitts economy until the 1970s. Following the 2005 harvest, the government closed the sugar industry after decades of losses of 3-4% of GDP annually. To compensate for employment losses, the government has embarked on a program to diversify the agricultural sector and to stimulate other sectors of the economy. Activities such as tourism, export-oriented manufacturing, and offshore banking have assumed larger roles in the economy and have contributed to the recent robust growth. Tourism revenues are now the chief source of the islands' foreign exchange; about 341,800 tourists visited Nevis in 2005. The current government is constrained by a high debt burden, public debt reached 190% of GDP by the end of 2005, largely attributable to public enterprise losses.
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  • Saint Lucia
    • Economy—overview: The island nation has been able to attract foreign business and investment, especially in its offshore banking and tourism industries, with a surge in foreign direct investment in 2006, attributed to the construction of several tourism projects. Tourism is the main source of foreign exchange, with almost 900,000 arrivals in 2007. The manufacturing sector is the most diverse in the Eastern Caribbean area, and the government is trying to revitalize the banana industry. Saint Lucia is vulnerable to a variety of external shocks including declines in European Union banana preferences, volatile tourism receipts, natural disasters, and dependence on foreign oil. High debt servicing obligations constrain the KING administration's ability to respond to adverse external shocks. Economic fundamentals remain solid, even though unemployment needs to be reduced.
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  • Saint Vincent & the Grenadines
    • Economy—overview: Economic growth slowed slightly in 2007 after reaching a 10 year high of nearly 7% in 2006, but is expected to remain robust, hinging upon seasonal variations in the agricultural and tourism sectors and a recent increase in construction activity. This lower-middle-income country is vulnerable to natural disasters - tropical storms wiped out substantial portions of crops in 1994, 1995, and 2002. In 2007, the islands had more than 200,000 tourist arrivals, mostly to the Grenadines. Saint Vincent is home to a small offshore banking sector and has moved to adopt international regulatory standards. The government's ability to invest in social programs and respond to external shocks is constrained by its high debt burden - 25 percent of current revenues are directed towards debt servicing.
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  • Suriname
    • Economy—overview: 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. The short-term economic outlook depends on the government's ability to control inflation and on the development of projects in the bauxite and gold mining sectors. Suriname has received aid for these projects from Netherlands, Belgium, and the European Development Fund. 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. 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. These economic policies are likely to remain in effect during VENETIAAN's third term. Prospects for local onshore oil production are good as a drilling program is underway. Offshore oil drilling was given a boost in 2004 when the State Oil Company (Staatsolie) signed exploration agreements with Repsol, Maersk, and Occidental. Bidding on these new offshore blocks was completed in July 2006.
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  • Trinidad & Tobago
    • Economy—overview: 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. Recent 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 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 proportionately as important as in many other Caribbean islands. The economy benefits from a growing trade surplus. Economic growth reached 12.6% in 2006 and 5.5% in 2007 as prices for oil, petrochemicals, and LNG remained high, and as foreign direct investment continued to grow to support expanded capacity in the energy sector.
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  • United States of America
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  • Uruguay
    • Economy—overview: Uruguay's economy is characterized by an export-oriented agricultural sector, a well-educated work force, and high levels of social spending. After averaging growth of 5% annually during 1996-98, in 1999-2002 the economy suffered a major downturn, stemming largely from the spillover effects of the economic problems of its large neighbors, Argentina and Brazil. For instance, in 2001-02 Argentina made massive withdrawals of dollars deposited in Uruguayan banks, which led to a plunge in the Uruguayan peso and a massive rise in unemployment. Total GDP in these four years dropped by nearly 20%, with 2002 the worst year due to the banking crisis. The unemployment rate rose to nearly 20% in 2002, inflation surged, and the burden of external debt doubled. Cooperation with the IMF helped stem the damage. Uruguay in 2007 improved its debt profile by paying off $1.1 billion in IMF debt, and continues to follow the orthodox economic plan set by the Fund in 2005. The construction of a pulp mill in Fray Bentos, which represents the largest foreign direct investment in Uruguay's history at $1.2 billion, came online in November 2007 and is expected to add 1.6% to GDP and boost already rising exports. The economy has grown strongly since 2004 as a result of high commodity prices for Uruguayan exports, a strong peso, growth in the region, and low international interest rates.
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    • Hispanolink Information site providing useful links to businesses, travel and news in Spanish
  • Venezuela
    • Economy—overview: Venezuela remains highly dependent on oil revenues, which account for roughly 90% of export earnings, more than 50% 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 in 2006 by about 9% and in 2007 by about 8%. 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 20 percent in 2007. Imports also have jumped significantly. Embolden by his December 2006 reelection, President Hugo CHAVEZ in 2007 nationalized firms in the petroleum, communications, and electricity sectors, which reduced foreign influence in the economy. Although voters in December 2007 rejected CHAVEZ's proposed constitutional changes, CHAVEZ still has significant control of the economy and has indicated he intends to continue to consolidate and centralize authority over the economy by implementing "21st Century Socialism."
    • Country Facts
    • Hispanolink Information site providing useful links to businesses, travel and news in Spanish

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