in real interest rates. A floating
exchange rate, an inflation-targeting regime, and a tight fiscal
policy are the three pillars of the economic program. From 2003 to
2007, Brazil ran record trade surpluses and recorded its first
current account surpluses since 1992. Productivity gains coupled
with high commodity prices contributed to the surge in exports.
Brazil improved its debt profile in 2006 by shifting its debt burden
toward real denominated and domestically held instruments. "LULA" DA
SILVA restated his commitment to fiscal responsibility by
maintaining the country's primary surplus during the 2006 election.
Following his second inauguration, "LULA" DA SILVA announced a
package of further economic reforms to reduce taxes and increase
investment in infrastructure. The government's goal of achieving
strong growth while reducing the debt burden is likely to create
inflationary pressures.

British Indian Ocean Territory
All economic activity is concentrated
on the largest island of Diego Garcia, where a joint UK-US military
facility is located. Construction projects and various services
needed to support the military installation are performed by
military and contract employees from the UK, Mauritius, the
Philippines, and the US. There are no industrial or agricultural
activities on the islands. When the native Ilois return, they plan
to reestablish sugarcane production and fishing. The territory earns
foreign exchange by selling fishing licenses and postage stamps.

British Virgin Islands
The economy, one of the most stable and
prosperous in the Caribbean, is highly dependent on tourism,
generating an estimated 45% of the national income. An estimated
820,000 tourists, mainly from the US, visited the islands in 2005.
In the mid-1980s, the government began offering offshore
registration to companies wishing to incorporate in the islands, and
incorporation fees now generate substantial revenues. Roughly
400,000 companies were on the offshore registry by yearend 2000. The
adoption of a comprehensive insurance law in late 1994, which
provides a blanket of confidentiality with regulated statutory
gateways for investigation of criminal offenses, made the British
Virgin Islands even more attractive to international business.
Livestock raising is the most important agricultural activity; poor
soils limit the islands' ability to meet domestic food