to nearly 20% in 2002, inflation
surged, and the burden of external debt doubled. Cooperation with
the IMF limited the damage. The debt swap with private creditors
carried out in 2003, which extended the maturity dates on nearly
half of Uruguay's $11.3 billion in public debt, substantially
alleviated the country's amortization burden in the coming years and
restored public confidence. The economy grew about 10% in 2004 as a
result of high commodity prices for Uruguayan exports, the weakness
of the dollar against the euro, growth in the region, low
international interest rates, and greater export competitiveness.

Uzbekistan
Uzbekistan is a dry, landlocked country of which 11%
consists of intensely cultivated, irrigated river valleys. More than
60% of its population lives in densely populated rural communities.
Uzbekistan is now the world's second-largest cotton exporter, a
large producer of gold and oil, and a regionally significant
producer of chemicals and machinery. Following independence in
December 1991, the government sought to prop up its Soviet-style
command economy with subsidies and tight controls on production and
prices. Uzbekistan responded to the negative external conditions
generated by the Asian and Russian financial crises by emphasizing
import substitute industrialization and by tightening export and
currency controls within its already largely closed economy. The
government, while aware of the need to improve the investment
climate, sponsors measures that often increase, not decrease, the
government's control over business decisions. A sharp increase in
the inequality of income distribution has hurt the lower ranks of
society since independence. In 2003, the government accepted the
obligations of Article VIII under the International Monetary Fund
(IMF), providing for full currency convertibility. However, strict
currency controls and tightening of borders have lessened the
effects of convertibility and have also led to some shortages that
have further stifled economic activity.

Vanuatu
This South Pacific island economy is based primarily on
small-scale agriculture, which provides a living for 65% of the
population. Fishing, offshore financial services, and tourism, with
about 50,000 visitors in 2004, are other mainstays of the economy.
Mineral deposits are negligible; the country has no known petroleum
deposits. A small lig