conomic problems. On 1 January 2006 a new value-added
tax (VAT) went into effect. The VAT has been successful in capturing
much of the gray market economy and has developed into a significant
and predictable source of revenues for all layers of government.
Bosnia and Herzegovina became a full member of the Central European
Free Trade Agreement in September 2007. The country receives
substantial reconstruction assistance and humanitarian aid from the
international community but will have to prepare for an era of
declining assistance.

Botswana
Botswana has maintained one of the world's highest economic
growth rates since independence in 1966, though growth slowed to
4.7% annually in 2006-07. Through fiscal discipline and sound
management, Botswana has transformed itself from one of the poorest
countries in the world to a middle-income country with a per capita
GDP of nearly $15,000 in 2007. Two major investment services rank
Botswana as the best credit risk in Africa. Diamond mining has
fueled much of the expansion and currently accounts for more than
one-third of GDP and for 70-80% of export earnings. Tourism,
financial services, subsistence farming, and cattle raising are
other key sectors. On the downside, the government must deal with
high rates of unemployment and poverty. Unemployment officially was
23.8% in 2004, but unofficial estimates place it closer to 40%.
HIV/AIDS infection rates are the second highest in the world and
threaten Botswana's impressive economic gains. An expected leveling
off in diamond mining production overshadows long-term prospects.

Bouvet Island
no economic activity; declared a nature reserve

Brazil
Characterized by large and well-developed agricultural,
mining, manufacturing, and service sectors, Brazil's economy
outweighs that of all other South American countries and is
expanding its presence in world markets. Having weathered 2001-03
financial turmoil, capital inflows are regaining strength and the
currency has resumed appreciating. The appreciation has slowed
export volume growth, but since 2004, Brazil's growth has yielded
increases in employment and real wages. The resilience in the
economy stems from commodity-driven current account surpluses, and
sound macroeconomic policies that have bolstered international
reserves to historically high levels, reduced public debt, and
allowed a significant decline