t is
attempting to develop an offshore financial sector and is planning
to construct an oil refinery on the eastern part of the island.

Dominican Republic
The Dominican Republic is a Caribbean
representative democracy which enjoyed GDP growth of more than 7% in
1998-2000. Growth subsequently plummeted as part of the global
economic slowdown. Although the country has long been viewed
primarily as an exporter of sugar, coffee, and tobacco, in recent
years the service sector has overtaken agriculture as the economy's
largest employer, due to growth in tourism and free trade zones. The
country suffers from marked income inequality; the poorest half of
the population receives less than one-fifth of GNP, while the
richest 10% enjoys nearly 40% of national income. Growth turned
negative in 2003 with reduced tourism, a major bank fraud, and
limited growth in the US economy (the source of about 85% of export
revenues), but recovered slightly in 2004. Resumption of a badly
needed IMF loan, slowed due to government repurchase of electrical
power plants, is basic to the restoration of social and economic
stability. Newly elected President FERNANDEZ in mid-2004 promised
belt-tightening reform. His administration has passed tax reform and
is working to meet preconditions for a $600 IMF standby arrangement
to ease the country's fiscal situation.

East Timor
In late 1999, about 70% of the economic infrastructure of
East Timor was laid waste by Indonesian troops and anti-independence
militias, and 300,000 people fled westward. Over the next three
years, however, a massive international program, manned by 5,000
peacekeepers (8,000 at peak) and 1,300 police officers, led to
substantial reconstruction in both urban and rural areas. By 2003,
all but about 30,000 of the refugees had returned. Growth was held
back in 2003 by extensive drought and the gradual winding down of
the international presence. The country faces great challenges in
continuing the rebuilding of infrastructure, strengthening the
infant civil administration, and generating jobs for young people
entering the workforce. One promising long-term project is the
planned development of oil and gas resources in nearby waters, which
have begun to supplement government revenues ahead of schedule.

Ecuador
Ecuador has substantial petroleum resources, which have
accounted for 40% of the country's export