quivalent to nearly all export
income. Implementation in 2006 of the Central America-Dominican
Republic Free Trade Agreement (CAFTA), which El Salvador was the
first to ratify, has strengthened an already positive export trend.
With the adoption of the US dollar as its currency in 2001, El
Salvador lost control over monetary policy and must concentrate on
maintaining a disciplined fiscal policy. The current government has
pursued economic diversification, with some success in promoting
textile production, international port services, and tourism through
tax incentives. It is committed to opening the economy to trade and
investment, and has embarked on a wave of privatizations extending
to telecom, electricity distribution, banking, and pension funds. In
late 2006, the government and the Millennium Challenge Corporation
signed a five-year, $461 million compact to stimulate economic
growth and reduce poverty in the country's northern region through
investments in education, public services, enterprise development,
and transportation infrastructure.

Equatorial Guinea
The discovery and exploitation of large oil
reserves have contributed to dramatic economic growth in recent
years. Forestry, farming, and fishing are also major components of
GDP. Subsistence farming predominates. Although pre-independence
Equatorial Guinea counted on cocoa production for hard currency
earnings, the neglect of the rural economy under successive regimes
has diminished potential for agriculture-led growth (the government
has stated its intention to reinvest some oil revenue into
agriculture). A number of aid programs sponsored by the World Bank
and the IMF have been cut off since 1993, because of corruption and
mismanagement. No longer eligible for concessional financing because
of large oil revenues, the government has been trying to agree on a
"shadow" fiscal management program with the World Bank and IMF.
Government officials and their family members own most businesses.
Undeveloped natural resources include titanium, iron ore, manganese,
uranium, and alluvial gold. Growth remained strong in 2007, led by
oil.

Eritrea
Since independence from Ethiopia in 1993, Eritrea has faced
the economic problems of a small, desperately poor country,
accentuated by the recent implementation of restrictive economic
policies. Eritrea has a command economy under the control of the