Ethiopia's poverty-stricken economy is based on
agriculture, which accounts for half of GDP, 60% of exports, and 80%
of total employment. The agricultural sector suffers from frequent
drought and poor cultivation practices. Coffee is critical to the
Ethiopian economy with exports of some $156 million in 2002, but
historically low prices have seen many farmers switching to qat to
supplement income. The war with Eritrea in 1998-2000 and recurrent
drought have buffeted the economy, in particular coffee production.
In November 2001 Ethiopia qualified for debt relief from the Highly
Indebted Poor Countries (HIPC) initiative. Under Ethiopia's land
tenure system, the government owns all land and provides long-term
leases to the tenants; the system continues to hamper growth in the
industrial sector as entrepreneurs are unable to use land as
collateral for loans. Drought struck again late in 2002, leading to
a 2% decline in GDP in 2003. Return to normal weather patterns late
in 2003 should help agricultural and GDP growth recover in 2004. The
government estimates that annual growth of 7% is needed to reduce
poverty.

Europa Island
no economic activity

European Union
Domestically, the European Union attempts to lower
trade barriers, adopt a common currency, and move toward convergence
of living standards. Internationally, the EU aims to bolster
Europe's trade position and its political and economic power.
Because of the great differences in per capita income (from $10,000
to $28,000) and historic national animosities, the European
Community faces difficulties in devising and enforcing common
policies. For example, both Germany and France since 2003 have
flouted the member states' treaty obligation to prevent their
national budgets from running more than a 3% deficit. In 2004, the
EU admitted 10 central and eastern European countries that are, in
general, less advanced technologically and economically than the
existing 15. The Economic and Monetary Union (EMU), an associated
organization, introduced the euro as the common currency on 1
January 1999. The UK, Sweden, and Denmark do not now participate;
the 10 new countries may choose to join the EMU when they meet its
fiscal and monetary criteria and the member states so agree.

Falkland Islands (Islas Malvinas)
The economy was formerly based on
agriculture, mainly sheep farming, but today fishing co