ver 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 lead to some shortages which
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 1997, are other mainstays of the economy.
Mineral deposits are negligible; the country has no known petroleum
deposits. A small light industry sector caters to the local market.
Tax revenues come mainly from import duties. Economic development is
hindered by dependence on relatively few commodity exports,
vulnerability to natural disasters, and long distances from main
markets and between constituent islands. A severe earthquake in
November 1999 followed by a tsunami, caused extensive damage to the
northern island of Pentecote and left thousands homeless. Another
powerful earthquake in January 2002 caused extensive damage in the
capital, Port-Vila, and surrounding areas, and also was followed by
a tsunami. GDP growth rose less than 3% on average in the 1990s. In
response to foreign concerns, the government has promised to tighten
regulation of its of