1.4 billion joint venture deal to
develop a huge natural gas field in the Somali Regional State. The
war with Eritrea forced the government to spend scarce resources on
the military and to scale back ambitious development plans. Foreign
investment has declined significantly. Government taxes imposed in
late 1999 to raise money for the war depressed an already weak
economy. The war forced the government to improve roads and other
parts of the previously neglected infrastructure, but only certain
regions of the nation benefited. Recovery from the war is mostly
contingent on natural factors. A drought has continued into the end
of 2000 and food relief is expected to be needed through mid-2001 at
least. Ethiopia may receive Highly Indebted Poor Countries (HIPC)
debt relief by the end of the year.

Europa Island:
no economic activity

Falkland Islands (Islas Malvinas):
The economy was formerly based on
agriculture, mainly sheep farming, but today fishing contributes the
bulk of economic activity. In 1987 the government began selling
fishing licenses to foreign trawlers operating within the Falklands
exclusive fishing zone. These license fees total more than $40
million per year, which goes to support the island's health,
education, and welfare system. Squid accounts for 75% of the fish
taken. Dairy farming supports domestic consumption; crops furnish
winter fodder. Exports feature shipments of high-grade wool to the
UK and the sale of postage stamps and coins. To encourage tourism,
the Falkland Islands Development Corporation has built three lodges
for visitors attracted by the abundant wildlife and trout fishing.
The islands are now self-financing except for defense. The British
Geological Survey announced a 200-mile oil exploration zone around
the islands in 1993, and early seismic surveys suggest substantial
reserves capable of producing 500,000 barrels per day; to date no
exploitable site has been identified. An agreement between Argentina
and the UK in 1995 seeks to defuse licensing and sovereignty
conflicts that would dampen foreign interest in exploiting potential
oil reserves.

Faroe Islands:
The Faroese economy has had a strong performance
since 1994, mostly as a result of increasing fish landings and high
and stable export prices. Unemployment is falling and there are
signs of labor shortages in several sectors. The positive economic