long-term stability of public finances. The government plans to
eventually lower its public sector deficit to below 3% of GDP to
adopt the euro.

Iceland
Iceland's Scandinavian-type economy is basically
capitalistic, yet with an extensive welfare system (including
generous housing subsidies), low unemployment, and remarkably even
distribution of income. In the absence of other natural resources
(except for abundant geothermal power), the economy depends heavily
on the fishing industry, which provides 70% of export earnings and
employs 6% of the work force. The economy remains sensitive to
declining fish stocks as well as to fluctuations in world prices for
its main exports: fish and fish products, aluminum, and
ferrosilicon. Substantial foreign investment in the aluminum and
hydropower sectors has boosted economic growth which, nevertheless,
has been volatile and characterized by recurrent imbalances.
Government policies include reducing the current account deficit,
limiting foreign borrowing, containing inflation, revising
agricultural and fishing policies, and diversifying the economy. The
government remains opposed to EU membership, primarily because of
Icelanders' concern about losing control over their fishing
resources. Iceland's economy has been diversifying into
manufacturing and service industries in the last decade, and new
developments in software production, biotechnology, and financial
services are taking place. The tourism sector is also expanding,
with the recent trends in ecotourism and whale watching. The 2006
closure of the US military base at Keflavik had very little impact
on the national economy; Iceland's low unemployment rate aided
former base employees in finding alternate employment.

India
India's diverse economy encompasses traditional village
farming, modern agriculture, handicrafts, a wide range of modern
industries, and a multitude of services. Services are the major
source of economic growth, accounting for more than half of India's
output with less than one third of its labor force. About
three-fifths of the work force is in agriculture, leading the United
Progressive Alliance (UPA) government to articulate an economic
reform program that includes developing basic infrastructure to
improve the lives of the rural poor and boost economic performance.
The government has reduced controls on foreign trade and invest