ly gaining
the support of the IMF and the World Bank in securing development
assistance loans. Significant challenges remain for MORAUTA,
however, including gaining further investor confidence, specifically
for the proposed Papua New Guinea-Australia oil pipeline, continuing
efforts to privatize government assets, and in maintaining the
support from members of Parliament who after 15 July 2001 can
dismiss him with a vote of no-confidence.

Paracel Islands:
China announced plans in 1997 to open the islands
for tourism.

Paraguay:
Paraguay has a market economy marked by a large informal
sector. The informal 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
derives their living from agricultural activity, often on a
subsistence basis. The formal economy grew by an average of about 3%
annually in 1995-97, but GDP declined slightly in 1998 and 1999. On
a per capita basis, real income has stagnated at 1980 levels. Most
observers attribute Paraguay's poor economic performance to
political uncertainty, corruption, lack of progress on structural
reform, substantial internal and external debt, and deficient
infrastructure. Growth rebounded slightly in 2000.

Peru:
The Peruvian economy has become increasingly market-oriented,
with major privatizations completed since 1990 in the mining,
electricity, and telecommunications industries. Thanks to strong
foreign investment and the cooperation between the FUJIMORI
government and the IMF and World Bank, growth was strong in 1994-97
and inflation was brought under control. In 1998, El Nino's impact
on agriculture, the financial crisis in Asia, and instability in
Brazilian markets undercut growth. And 1999 was another lean year
for Peru, with the aftermath of El Nino and the Asian financial
crisis working its way through the economy. Political instability
resulting from the presidential election and FUJIMORI's subsequent
departure from office limited economic growth in 2000.

Philippines:
In 1998 the Philippine economy - a mixture of
agriculture, light industry, and supporting services - deteriorated
as a result of spillover from the Asian financial cris