dget deficits and the country's poor business climate
made it vulnerable when the global financial crisis swept through in
1998. The crisis culminated in the August depreciation of the ruble,
a debt default by the government, and a sharp deterioration in
living standards for most of the population. The economy rebounded
in 1999 and 2000, buoyed by the competitive boost from the weak
ruble and a surging trade surplus fueled by rising world oil prices.
This recovery, along with a renewed government effort in 2000 to
advance lagging structural reforms, have raised business and
investor confidence over Russia's prospects in its second decade of
transition. Yet serious problems persist. Russia remains heavily
dependent on exports of commodities, particularly oil, natural gas,
metals, and timber, which account for over 80% of exports, leaving
the country vulnerable to swings in world prices. Russia's
agricultural sector remains beset by uncertainty over land ownership
rights, which has discouraged needed investment and restructuring.
Another threat is negative demographic trends, fueled by low birth
rates and a deteriorating health situation - including an alarming
rise in AIDS cases - that have contributed to a nearly 2% drop in
the population since 1992. Russia's industrial base is increasingly
dilapidated and must be replaced or modernized if the country is to
achieve sustainable economic growth. Other problems include
widespread corruption, capital flight, and brain drain.

Rwanda:
Rwanda is a rural country with about 90% of the population
engaged in (mainly subsistence) agriculture. It is the most densely
populated country in Africa; is landlocked; and has few natural
resources and minimal industry. Primary exports are coffee and tea.
The 1994 genocide decimated Rwanda's fragile economic base, severely
impoverished the population, particularly women, and eroded the
country's ability to attract private and external investment.
However, Rwanda has made significant progress in stabilizing and
rehabilitating its economy. GDP has rebounded, and inflation has
been curbed. In June 1998, Rwanda signed an Enhanced Structural
Adjustment Facility (ESAF) with the IMF. Rwanda has also embarked
upon an ambitious privatization program with the World Bank.
Continued growth in 2001 depends on the maintenance of international
aid levels and the strengthening of world