ite producer. The mining sector accounted for about 75%
of exports in 1999. Long-run improvements in government fiscal
arrangements, literacy, and the legal framework are needed if the
country is to move out of poverty. The government made encouraging
progress in budget management in 1997-99, and reform progress was
praised in the World Bank/IMF October 2000 assessment. However,
escalating fighting along the Sierra Leonean and Liberian borders
will cause major economic disruptions. In addition to direct defense
costs, the violence has led to a sharp decline in investor
confidence. Foreign mining companies have reduced expatriate staff,
while panic buying has created food shortages and inflation in local
markets. Real GDP growth is expected to fall to 2% in 2001.

Guinea-Bissau:
One of the 20 poorest countries in the world,
Guinea-Bissau depends mainly on farming and fishing. Cashew crops
have increased remarkably in recent years, and the country now ranks
sixth in cashew production. Guinea-Bissau exports fish and seafood
along with small amounts of peanuts, palm kernels, and timber. Rice
is the major crop and staple food. However, intermittent fighting
between Senegalese-backed government troops and a military junta
destroyed much of the country's infrastructure and caused widespread
damage to the economy in 1998; the civil war led to a 28% drop in
GDP that year, with partial recovery in 1999-2000. Before the war,
trade reform and price liberalization were the most successful part
of the country's structural adjustment program under IMF
sponsorship. The tightening of monetary policy and the development
of the private sector had also begun to reinvigorate the economy.
Because of high costs, the development of petroleum, phosphate, and
other mineral resources is not a near-term prospect. However,
unexploited offshore oil reserves could provide much-needed revenue
in the long run.

Guyana:
Severe drought and political turmoil contributed to Guyana's
negative growth of -1.8% for 1998 following six straight years of
growth of 5% or better. Growth came back to a positive 1.8% in 1999
and 3% in 2000. Underlying growth factors have included expansion in
the key agricultural and mining sectors, a more favorable atmosphere
for business initiative, a more realistic exchange rate, a moderate
inflation rate, and continued support by international
organizat