Flag description: three horizontal bands of green (top), yellow
(double width), and green with two black five-pointed stars placed
side by side in the center of the yellow band and a red isosceles
triangle based on the hoist side; uses the popular pan-African
colors of Ethiopia

Sao Tome and Principe Economy

Economy - overview: This small poor island economy has become
increasingly dependent on cocoa since independence 25 years ago.
However, cocoa production has substantially declined because of
drought and mismanagement. The resulting shortage of cocoa for
export has created a persistent balance-of-payments problem. Sao
Tome has to import all fuels, most manufactured goods, consumer
goods, and a significant amount of food. Over the years, it has been
unable to service its external debt and has had to depend on
concessional aid and debt rescheduling. Sao Tome benefited from $200
million in debt relief in December 2000 under the Highly Indebted
Poor Countries (HIPC) program. 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, but economic
growth has remained sluggish. Sao Tome is also optimistic that
significant petroleum discoveries are forthcoming in its territorial
waters in the oil-rich waters of the Gulf of Guinea. Corruption
scandals continue to weaken the economy. At the same time, progress
in the economic reform program has attracted international financial
institutions' support, and GDP growth will likely rise to at least
4% in 2001-02.

GDP: purchasing power parity - $178 million (2000 est.)

GDP - real growth rate: 3% (2000 est.)

GDP - per capita: purchasing power parity - $1,100 (2000 est.)

GDP - composition by sector: agriculture: 23%

industry: 19%

services: 58% (1997 est.)

Population below poverty line: NA%

Household income or consumption by percentage share: lowest 10%: NA%

highest 10%: NA%

Inflation rate (consumer prices): 5% (2000 est.)

Labor force: NA

Labor force - by occupation: population mainly engaged in
subsistence agriculture and fishing

note: shortages of skilled workers

Unemployment rate: NA%

Budget: revenues: $58 million

expenditures: $114 million, including capital expenditures of $54
million (1993 est.)

Industries: light construction, textiles, soap, beer; fish
processing;