re markets. In 2005, the government passed a controversial
hydrocarbons law that imposed significantly higher royalties and
required foreign firms then operating under risk-sharing contracts
to surrender all production to the state energy company, which was
made the sole exporter of natural gas. The law also required that
the state energy company regain control over the five companies that
were privatized during the 1990s - a process that is still underway.
In 2006, higher earnings for mining and hydrocarbons exports pushed
the current account surplus to about 12% of GDP and the government's
higher tax take produced a fiscal surplus after years of large
deficits. Debt relief from the G8 - announced in 2005 - also has
significantly reduced Bolivia's public sector debt burden. Private
investment as a share of GDP, however, remains among the lowest in
Latin America, and inflation reached double-digit levels in 2007.

Bosnia and Herzegovina
Bosnia and Herzegovina ranked next to
Macedonia as the poorest republic in the old Yugoslav federation.
Although agriculture is almost all in private hands, farms are small
and inefficient, and the republic traditionally is a net importer of
food. The private sector is growing and foreign investment is slowly
increasing, but government spending, at nearly 40% of adjusted GDP,
remains unreasonably high. The interethnic warfare in Bosnia caused
production to plummet by 80% from 1992 to 1995 and unemployment to
soar. With an uneasy peace in place, output recovered in 1996-99 at
high percentage rates from a low base; but output growth slowed in
2000-02. Part of the lag in output was made up in 2003-07 when GDP
growth exceeded 5% per year. National-level statistics are limited
and do not capture the large share of black market activity. The
konvertibilna marka (convertible mark or BAM)- the national currency
introduced in 1998 - is pegged to the euro, and confidence in the
currency and the banking sector has increased. Implementing
privatization, however, has been slow, particularly in the
Federation, although more successful in the Republika Srpska.
Banking reform accelerated in 2001 as all the Communist-era payments
bureaus were shut down; foreign banks, primarily from Western
Europe, now control most of the banking sector. A sizeable current
account deficit and high unemployment rate remain the two most
serious macroe