ual-island nation's
agricultural production is focused on the domestic market and
constrained by a limited water supply and a labor shortage stemming
from the lure of higher wages in tourism and construction.
Manufacturing comprises enclave-type assembly for export with major
products being bedding, handicrafts, and electronic components.
Prospects for economic growth in the medium term will continue to
depend on income growth in the industrialized world, especially in
the US, which accounts for slightly more than one-third of tourist
arrivals.

Arctic Ocean
Economic activity is limited to the exploitation of
natural resources, including petroleum, natural gas, fish, and seals.

Argentina
Argentina benefits from rich natural resources, a highly
literate population, an export-oriented agricultural sector, and a
diversified industrial base. Over the past decade, however, the
country has suffered recurring economic problems of inflation,
external debt, capital flight, and budget deficits. Growth in 2000
was a negative 0.8%, as both domestic and foreign investors remained
skeptical of the government's ability to pay debts and maintain the
peso's fixed exchange rate with the US dollar. The economic
situation worsened in 2001 with the widening of spreads on Argentine
bonds, massive withdrawals from the banks, and a further decline in
consumer and investor confidence. Government efforts to achieve a
"zero deficit," to stabilize the banking system, and to restore
economic growth proved inadequate in the face of the mounting
economic problems. The peso's peg to the dollar was abandoned in
January 2002, and the peso was floated in February; the exchange
rate plunged and inflation picked up rapidly, but by mid-2002 the
economy had stabilized, albeit at a lower level. Strong demand for
the peso compelled the Central Bank to intervene in foreign exchange
markets to curb its appreciation in 2003. Led by record exports, the
economy began to recover with output up 8% in 2003, unemployment
falling, and inflation reduced to under 4% at year-end.

Armenia
Under the old Soviet central planning system, Armenia had
developed a modern industrial sector, supplying machine tools,
textiles, and other manufactured goods to sister republics in
exchange for raw materials and energy. Since the implosion of the
USSR in December 1991, Armenia has switched to small-scale