the
country's current GDP. Azerbaijan shares all the formidable problems
of the former Soviet republics in making the transition from a
command to a market economy, but its considerable energy resources
brighten its long-term prospects. Baku has only recently begun
making progress on economic reform, and old economic ties and
structures are slowly being replaced. Several other obstacles impede
Azerbaijan's economic progress: the need for stepped up foreign
investment in the non-energy sector, the continuing conflict with
Armenia over the Nagorno-Karabakh region, and the pervasive
corruption. Trade with Russia and the other former Soviet republics
is declining in importance while trade is building with Turkey and
the nations of Europe. Long-term prospects will depend on world oil
prices, the location of new pipelines in the region, and
Azerbaijan's ability to manage its oil wealth.

Bahamas, The
The Bahamas is a stable, developing nation with an
economy heavily dependent on tourism and offshore banking. Tourism
together with tourism-driven construction and manufacturing accounts
for approximately 60% of GDP and directly or indirectly employs half
of the archipelago's labor force. Steady growth in tourism receipts
and a boom in construction of new hotels, resorts, and residences
had led to solid GDP growth in recent years, but the slowdown in the
US economy and the attacks of 11 September 2001 held back growth in
these sectors in 2001-03. The current government has presided over a
period of economic recovery and an upturn in large-scale private
sector investments in tourism. Financial services constitute the
second-most important sector of the Bahamian economy, accounting for
about 15% of GDP. However, since December 2000, when the government
enacted new regulations on the financial sector, many international
businesses have left The Bahamas. Manufacturing and agriculture
together contribute approximately a tenth of GDP and show little
growth, despite government incentives aimed at those sectors.
Overall growth prospects in the short run rest heavily on the
fortunes of the tourism sector, which depends on growth in the US,
the source of more than 80% of the visitors.

Bahrain
With its highly developed communication and transport
facilities, Bahrain is home to numerous multinational firms with
business in the Gulf. Petroleum production and refini