ependent on cocoa since independence 25 years ago.
However, cocoa production has substantially declined because of
drought and mismanagement. The resulting shortage of cocoa for
export has created a persistent balance-of-payments problem. Sao
Tome has to import all fuels, most manufactured goods, consumer
goods, and a significant amount of food. Over the years, it has been
unable to service its external debt and has had to depend on
concessional aid and debt rescheduling. Sao Tome benefited from $200
million in debt relief in December 2000 under the Highly Indebted
Poor Countries (HIPC) program. Considerable potential exists for
development of a tourist industry, and the government has taken
steps to expand facilities in recent years. The government also has
attempted to reduce price controls and subsidies, but economic
growth has remained sluggish. Sao Tome is also optimistic that
significant petroleum discoveries are forthcoming in its territorial
waters in the oil-rich waters of the Gulf of Guinea. Corruption
scandals continue to weaken the economy. At the same time, progress
in the economic reform program has attracted international financial
institutions' support, and GDP growth will likely rise to at least
4% in 2001-02.

Saudi Arabia:
This is an oil-based economy with strong government
controls over major economic activities. Saudi Arabia has the
largest reserves of petroleum in the world (26% of the proved
reserves), ranks as the largest exporter of petroleum, and plays a
leading role in OPEC. The petroleum sector accounts for roughly 75%
of budget revenues, 40% of GDP, and 90% of export earnings. About
35% of GDP comes from the private sector. Roughly 5 million foreign
workers play an important role in the Saudi economy, for example, in
the oil and service sectors. Saudi Arabia was a key player in the
successful efforts of OPEC and other oil producing countries to
raise the price of oil in 1999-2000 to its highest level since the
Gulf war by reducing production. Riyadh expects to have a moderate
budget deficit in 2001, in part because of increased spending for
education and other social programs. The government in 1999
announced plans to begin privatizing the electricity companies,
which follows the ongoing privatization of the telecommunications
company. The government is expected to continue calling for private
sector growth to lessen