the expected leveling off in diamond mining production.

Bouvet Island
no economic activity; declared a nature reserve

Brazil
Possessing large and well-developed agricultural, mining,
manufacturing, and service sectors, Brazil's economy outweighs that
of all other South American countries and is expanding its presence
in world markets. From 2001-03 real wages fell and Brazil's economy
grew, on average, only 1.1% per year, as the country absorbed a
series of domestic and international economic shocks. That Brazil
absorbed these shocks without financial collapse is a tribute to the
resiliency of the Brazilian economy and the economic program put in
place by former President CARDOSO and strengthened by President Lula
DA SILVA. The three pillars of the economic program are a floating
exchange rate, an inflation-targeting regime, and tight fiscal
policy, which have been reinforced by a series of IMF programs. The
currency depreciated sharply in 2001 and 2002, which contributed to
a dramatic current account adjustment: in 2003, Brazil ran a record
trade surplus and recorded the first current account surplus since
1992. While economic management has been good, there remain
important economic vulnerabilities. The most significant are
debt-related: the government's largely domestic debt increased
steadily from 1994 to 2003, straining government finances, while
Brazil's foreign debt (a mix of private and public debt) is large in
relation to Brazil's modest (but growing) export base. Another
challenge is maintaining economic growth over a period of time to
generate employment and make the government debt burden more
manageable.

British Indian Ocean Territory
All economic activity is concentrated
on the largest island of Diego Garcia, where joint UK-US defense
facilities are located. Construction projects and various services
needed to support the military installations are done by military
and contract employees from the UK, Mauritius, the Philippines, and
the US. There are no industrial or agricultural activities on the
islands. When the Ilois return, they plan to reestablish sugarcane
production and fishing.

British Virgin Islands
The economy, one of the most stable and
prosperous in the Caribbean, is highly dependent on tourism,
generating an estimated 45% of the national income. An estimated
350,000 tourists, mainly from the US, visited the i