n
areas. Subsistence agriculture accounts for half of GDP and provides
80% of total employment. The economy will continue to benefit from
aid from the IMF and other international sources and from new
foreign investment in food processing and mining. In late 2004, Laos
gained Normal Trade Relations status with the US, allowing
Laos-based producers to face lower tariffs on their exports; this
may help spur growth.

Latvia
Latvia's transitional economy recovered from the 1998 Russian
financial crisis, largely due to the government's budget stringency
and a gradual reorientation of exports toward EU countries,
lessening Latvia's trade dependency on Russia. The majority of
companies, banks, and real estate have been privatized, although the
state still holds sizable stakes in a few large enterprises. Latvia
officially joined the World Trade Organization in February 1999. EU
membership, a top foreign policy goal, came in May 2004. The current
account and internal government deficits remain major concerns, but
the government's efforts to increase efficiency in revenue
collection may lessen the budget deficit. A growing perception that
many of Latvia's banks facilitate illicit activity could damage the
country's vibrant financial sector.

Lebanon
The 1975-91 civil war seriously damaged Lebanon's economic
infrastructure, cut national output by half, and all but ended
Lebanon's position as a Middle Eastern entrepot and banking hub. In
the years since, Lebanon has rebuilt much of its war-torn physical
and financial infrastructure by borrowing heavily - mostly from
domestic banks. In an attempt to reduce the ballooning national
debt, the HARIRI government began an austerity program, reining in
government expenditures, increasing revenue collection, and
privatizing state enterprises. In November 2002, the government met
with international donors at the Paris II conference to seek
bilateral assistance in restructuring its massive domestic debt at
lower rates of interest. Substantial receipts from donor nations
stabilized government finances in 2003, but did little to reduce the
debt, which stood at nearly 180% of GDP. In 2004 the HARIRI
government issued Eurobonds in an effort to manage maturing debt,
and the KARAMI government has continued this practice. However,
privatization of state-owned enterprises had not occurred by the end
of 2004, as promised d