d, less able to buy goods. In 2004, the
regime allowed private markets to sell a wider range of goods and
permitted private farming on an experimental basis in an effort to
boost agricultural output. Firm political control remains the
Communist government's overriding concern, which will constrain any
further loosening of economic regulations.

Korea, South
Since the early 1960s, South Korea has achieved an
incredible record of growth and integration into the high-tech
modern world economy. Four decades ago GDP per capita was comparable
with levels in the poorer countries of Africa and Asia. In 2004, it
joined the trillion dollar club of world economies. Today its GDP
per capita is 14 times North Korea's and equal to the lesser
economies of the European Union. This success through the late 1980s
was achieved by a system of close government/business ties,
including directed credit, import restrictions, sponsorship of
specific industries, and a strong labor effort. The government
promoted the import of raw materials and technology at the expense
of consumer goods and encouraged savings and investment over
consumption. The Asian financial crisis of 1997-99 exposed
longstanding weaknesses in South Korea's development model,
including high debt/equity ratios, massive foreign borrowing, and an
undisciplined financial sector. Growth plunged to a negative 6.9% in
1998, then strongly recovered to 9.5% in 1999 and 8.5% in 2000.
Growth fell back to 3.3% in 2001 because of the slowing global
economy, falling exports, and the perception that much-needed
corporate and financial reforms had stalled. Led by consumer
spending and exports, growth in 2002 was an impressive 7.0%, despite
anemic global growth. Economic growth fell to 3.1% in 2003 because
of a downturn in consumer spending and recovered to an estimated
4.6% in 2004 on the strength of rapid export growth. The government
plans to boost infrastructure spending in 2005. Moderate inflation,
low unemployment, an export surplus, and fairly equal distribution
of income characterize this solid economy.

Kuwait
Kuwait is a small, rich, relatively open economy with proved
crude oil reserves of about 96 billion barrels - 10% of world
reserves. Petroleum accounts for nearly half of GDP, 95% of export
revenues, and 80% of government income. Kuwait's climate limits
agricultural development. Consequently, with the