has helped facilitate a foreign investment boom
with business-friendly policies, such as labor market liberalization
and a 19% flat tax. Slovakia's economic growth exceeded expectations
in 2001-04, despite the general European slowdown. Unemployment, at
an unacceptable 15% in 2003-04, remains the economy's Achilles heel.
Slovakia joined the EU on 1 May 2004.

Slovenia
Slovenia, with its historical ties to Western Europe,
enjoys a GDP per capita substantially higher than that of the other
transitioning economies of Central Europe. In March 2004, Slovenia
became the first transition country to graduate from borrower status
to donor partner at the World Bank. Privatization of the economy
proceeded at an accelerated pace in 2002-04. Despite lackluster
performance in Europe in 2001-04, Slovenia maintained moderate
growth. Structural reforms to improve the business environment have
allowed for greater foreign participation in Slovenia's economy and
have helped to lower unemployment. Further measures to curb
inflation are still needed. Corruption and the high degree of
coordination between government, business, and central bank policy
were issues of concern in the run-up to Slovenia's 1 May 2004
accession to the European Union. In mid-2004 Slovenia agreed to
adopt the euro by 2007 and, therefore, must keep its debt levels,
budget deficits, interest rates, and inflation levels within the
EU's Maastrict criteria.

Solomon Islands
The bulk of the population depends on agriculture,
fishing, and forestry for at least part of their livelihood. Most
manufactured goods and petroleum products must be imported. The
islands are rich in undeveloped mineral resources such as lead,
zinc, nickel, and gold. Prior to the arrival of the Regional
Assistance Mission to the Solomon Islands (RAMSI), severe ethnic
violence, the closing of key businesses, and an empty government
treasury culminated in economic collapse. RAMSI has enabled a return
to law and order, a new period of economic stability, and modest
growth as the economy rebuilds.

Somalia
Somalia's economic fortunes are driven by its deep political
divisions. The northwestern area has declared its independence as
the "Republic of Somaliland"; the northeastern region of Puntland is
a semi-autonomous state; and the remaining southern portion is
riddled with the struggles of rival factions. Economic life
conti