ountry has long been viewed
primarily as an exporter of sugar, coffee, and tobacco, in recent
years the service sector has overtaken agriculture as the economy's
largest employer, due to growth in tourism and free trade zones. The
country suffers from marked income inequality; the poorest half of
the population receives less than one-fifth of GNP, while the
richest ten percent enjoy 40% of national income. In December 2000,
the new MEJIA administration passed broad new tax legislation which
it hopes will provide enough revenue to offset rising oil prices and
to service foreign debt.

Ecuador:
Ecuador has substantial oil resources and rich agricultural
areas. Because the country exports primary products such as oil,
bananas, and shrimp, fluctuations in world market prices can have a
substantial domestic impact. Ecuador joined the World Trade
Organization in 1996, but has failed to comply with many of its
accession commitments. In recent years, growth has been uneven due
to ill-conceived fiscal stabilization measures. The aftermath of El
Nino and depressed oil market of 1997-98 drove Ecuador's economy
into a free-fall in 1999. The beginning of 1999 saw the banking
sector collapse, which helped precipitate an unprecedented default
on external loans later that year. Continued economic instability
drove a 70% depreciation of the currency throughout 1999, which
eventually forced a desperate government to "dollarize" the currency
regime in 2000. The move stabilized the currency, but did not stave
off the ouster of the government. The new president, Gustavo NOBOA
has yet to complete negotiations for a long sought IMF accord. He
will find it difficult to push through the reforms necessary to make
"dollarization" work in the long run.

Egypt:
A series of IMF arrangements - along with massive external
debt relief resulting from Egypt's participation in the Gulf war
coalition - helped Egypt improve its macroeconomic performance
during the 1990s. Sound fiscal and monetary policies through the
mid-1990s helped to tame inflation, slash budget deficits, and build
up foreign reserves, while structural reforms such as privatization
and new business legislation prompted increased foreign investment.
By mid-1998, however, the pace of structural reform slackened, and
lower combined hard currency earnings resulted in pressure on the
Egyptian pound and sporadic US d