rily due to duty-free access to the United States.
Deforestation and erosion, aggravated by the use of firewood as the
primary source of fuel are serious concerns. President RAVALOMANANA
has worked aggressively to revive the economy following the 2002
political crisis, which triggered a 12% drop in GDP that year.
Poverty reduction and combating corruption will be the centerpieces
of economic policy for the next few years.

Malawi
Landlocked Malawi ranks among the world's least developed
countries. The economy is predominately agricultural, with about 90%
of the population living in rural areas. Agriculture accounted for
nearly 40% of GDP and 88% of export revenues in 2001. The
performance of the tobacco sector is key to short-term growth as
tobacco accounts for over 50% of exports. The economy depends on
substantial inflows of economic assistance from the IMF, the World
Bank, and individual donor nations. In late 2000, Malawi was
approved for relief under the Heavily Indebted Poor Countries (HIPC)
program. The government faces strong challenges, including
developing a market economy, improving educational facilities,
facing up to environmental problems, dealing with the rapidly
growing problem of HIV/AIDS, and satisfying foreign donors that
fiscal discipline is being tightened. In 2005, the anticorruption
campaign championed by President MUTHARIKA may help encourage
investment and economic growth.

Malaysia
Malaysia, a middle-income country, transformed itself from
1971 through the late 1990's from a producer of raw materials into
an emerging multi-sector economy. Growth was almost exclusively
driven by exports - particularly of electronics. As a result,
Malaysia was hard hit by the global economic downturn and the slump
in the information technology (IT) sector in 2001 and 2002. GDP in
2001 grew only 0.5% due to an estimated 11% contraction in exports,
but a substantial fiscal stimulus package equal to US $1.9 billion
mitigated the worst of the recession and the economy rebounded in
2002 with a 4.1% increase. The economy grew 4.9% in 2003,
notwithstanding a difficult first half, when external pressures from
SARS and the Iraq War led to caution in the business community.
Growth topped 7% in 2004. Healthy foreign exchange reserves, low
inflation, and a small external debt are all strengths that make it
unlikely that Malaysia will experience a f