and a Greek economic embargo over a dispute about the
country's constitutional name and flag hindered economic growth
until 1996. GDP subsequently rose each year through 2000. However,
the leadership's commitment to economic reform, free trade, and
regional integration was undermined by the ethnic Albanian
insurgency of 2001. The economy shrank 4.5% because of decreased
trade, intermittent border closures, increased deficit spending on
security needs, and investor uncertainty. Growth barely recovered in
2002 to 0.9%, then averaged 4% per year during 2003-06. Macedonia
has maintained macroeconomic stability with low inflation, but it
has lagged the region in attracting foreign investment and job
growth has been anemic. Macedonia has an extensive grey market,
estimated to be more than 20 percent of GDP, that falls outside
official statistics.

Madagascar
Having discarded past socialist economic policies,
Madagascar has since the mid 1990s followed a World Bank- and
IMF-led policy of privatization and liberalization. This strategy
placed the country on a slow and steady growth path from an
extremely low level. Agriculture, including fishing and forestry, is
a mainstay of the economy, accounting for more than one-fourth of
GDP and employing 80% of the population. Exports of apparel have
boomed in recent years primarily due to duty-free access to the
United States. Deforestation and erosion, aggravated by the use of
firewood as the primary source of fuel, are serious concerns.
President RAVALOMANANA has worked aggressively to revive the economy
following the 2002 political crisis, which triggered a 12% drop in
GDP that year. Poverty reduction and combating corruption will be
the centerpieces of economic policy for the next few years.

Malawi
Landlocked Malawi ranks among the world's least developed
countries. The economy is predominately agricultural, with about 90%
of the population living in rural areas. Agriculture accounted for
nearly 36% of GDP and 80% of export revenues in 2005. The
performance of the tobacco sector is key to short-term growth as
tobacco accounts for over 60% of exports. The economy depends on
substantial inflows of economic assistance from the IMF, the World
Bank, and individual donor nations. In late 2000, Malawi was
approved for relief under the Heavily Indebted Poor Countries (HIPC)
program. The government faces strong c