sing to 2.4%. A major
short-term problem in first half 2002 was a sharp decline in the
stock market, fueled in part by the exposure of dubious accounting
practices in some major corporations. The war in March/April 2003
between a US-led coalition and Iraq shifted resources to the
military. In 2003, growth in output and productivity and the
recovery of the stock market to above 10,000 for the Dow Jones
Industrial Average were promising signs. Unemployment stayed at the
6% level, however, and began to decline only at the end of the year.
Long-term problems include inadequate investment in economic
infrastructure, rapidly rising medical and pension costs of an aging
population, sizable trade and budget deficits, and stagnation of
family income in the lower economic groups.

Uruguay
Uruguay's well-to-do economy is characterized by an
export-oriented agricultural sector, a well-educated workforce, and
high levels of social spending. After averaging growth of 5%
annually during 1996-98, in 1999-2002 the economy suffered a major
downturn, stemming largely from the spillover effects of the
economic problems of its large neighbors, Argentina and Brazil. For
instance, in 2001-02 massive withdrawals by Argentina of dollars
deposited in Uruguayan banks led to a plunge in the Uruguyan peso
and a massive rise in unemployment. Total GDP in these four years
dropped by nearly 20%, with 2002 the worst year due to the serious
banking crisis. Unemployment rose to nearly 20% in 2002, inflation
surged, and the burden of external debt doubled. Cooperation with
the IMF and the US has 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 is expected
to resume growth in 2004 (perhaps 4% or more) 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. On the negative side, in
December 2003 the electorate voted to repeal the law permitting a
cautious liberalization of the energy industry.

Uzbekistan
Uzbekistan is a dry, landlocked country of which 11%
consists of intensely cultivated, irrigated ri