es in the world to a middle-income country with a
per capita GDP of $9,200 in 2004. 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 is
23.8%, 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 overshadow long-term prospects.

Bouvet Island
no economic activity; declared a nature reserve

Brazil
Possessing 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. From 2001-03 real wages fell and Brazil's economy
grew, on average, only 2.2% per year, as the country absorbed a
series of domestic and international economic shocks. That Brazil
absorbed these shocks without financial collapse is a tribute to the
resiliency of the Brazilian economy and the economic program put in
place by former President CARDOSO and strengthened by President LULA
DA SILVA. In 2004, Brazil enjoyed more robust growth that yielded
increases in employment and real wages. The three pillars of the
economic program are a floating exchange rate, an
inflation-targeting regime, and tight fiscal policy, all reinforced
by a series of IMF programs. The currency depreciated sharply in
2001 and 2002, which contributed to a dramatic current account
adjustment: in 2003 and 2004, Brazil ran record trade surpluses and
recorded its first current account surpluses since 1992.
Productivity gains - particularly in agriculture - also contributed
to the surge in exports, and Brazil in 2004 surpassed the previous
year's record export level and again posted a current account
surplus. While economic management has been good, there remain
important economic vulnerabilities. The most significant are
debt-related: the government's largely domestic debt increased
steadily from 1994 to 2003 - straining government finances - before
fa