, many involving land tenure. The EU accession
process should accelerate fiscal and structural reform.

Cuba
The government continues to balance the need for economic
loosening against a desire for firm political control. It has
undertaken limited reforms to increase enterprise efficiency and
alleviate serious shortages of food, consumer goods, and services. A
major feature of the economy is the dichotomy between relatively
efficient export enclaves and inefficient domestic sectors. The
average Cuban's standard of living remains at a lower level than
before the depression of the 1990s, which was caused by the loss of
Soviet aid and domestic inefficiencies. The government in 2004
strengthened its controls over dollars coming into the economy from
tourism, remittances, and trade.

Cyprus
The Greek Cypriot economy is prosperous but highly
susceptible to external shocks. The service sector, mainly tourism
and financial services, dominates the economy; erratic growth rates
over the past decade reflect the economy's reliance on tourism,
which often fluctuates with political instability in the region and
economic conditions in Western Europe. Economic policy is focused on
meeting the criteria to join the European Exchange Rate Mechanism
(ERM2) within the next two years although sluggish tourism and poor
fiscal management have resulted in growing budget deficits since
2001. As in the Turkish sector, water shortages are a perennial
problem; a few desalination plants are now on-line. After 10 years
of drought, the country received substantial rainfall from 2001-03,
alleviating immediate concerns. The Turkish Cypriot economy has
roughly one-third of the per capita GDP of the south, and economic
growth tends to be volatile, given north Cyprus's relative
isolation, bloated public sector, reliance on the Turkish lira, and
small market size. The Turkish Cypriot economy grew 2.6% in 2004,
fueled by growth in the construction and education sectors as well
as increased employment of Turkish Cypriots in the Republic of
Cyprus. The Turkish Cypriots are heavily dependent on transfers from
the Turkish government. Ankara provides around $300 million a year
directly into the "TRNC" budget and regularly provides additional
financing for large infrastructure projects. Agriculture and
government service, together employ almost half of the work force,
and the potential f