Laos economy: Struggling to grow.

One of the poorest countries of the world, the South East Asian nation of Laos is heavily dependent on external aid to sustain its economy.

Laos is a primarily agricultural economy, with the majority of its people dependent on subsistence agriculture. Among the important agricultural products from Laos are, corn, coffee, sugarcane, tobacco, tea, cotton, rice, etc. Mining is also an important activity, with copper taking the lead. Gold and tin are also mined in good quantity. And international prices of these metals have an important impact on the revenues accruing to Laos.

Among the industries of note in Laos, apart from mining are tourism, cement, garments, agro-processing, etc. The country exports coffee, electricity, tin, timber, copper, gold, etc., and imports consumer goods, machinery and equipment, fuels, etc.

The GDP of the country is expected to grow by 7.5% in 2009, though there are reservations in certain quarters about this rate in view of the current economic situation. Inflation is around 8.6%, and unemployment is around 2.4%.

Laos is slowly making the transition from a centralized economy to a market oriented one. But the present global economic situation is playing spoilsport with this process. Much depends on growth and demand in China and neighboring countries that could offer opportunities to Laos for its goods and services. Laos is also in the process of attracting foreign direct investment. The Government is also making efforts to develop the Banking industry to face up to future challenges.

One of the major challenges faced by Laos is to balance its revenues with requirements for developmental activities. With bilateral and other aid on the decline, and revenues from its metals and other exports coming down due to depressed prices in the international markets, Laos is forced to cut down on public spending, again with its own consequences. Unless there is a drastic change in the economic environment, in general, Laos may find the path towards economic development and progress, a great struggle.

Belarus economy: Inconsistent performer.

A former member of the Soviet bloc that suffered the devastation of the Chernobyl disaster in the late eighties, Belarus has set an inconsistent record in economic development, over the years. The landlockecd country clocked a growth rate of GDP of 7.30% in the first half of the current fiscal, with inflation running at around 3.80%, and unemployment at just 1.20% officially, though the actual rate is said to be higher.

Belarus has experimented with privatization after breaking up with the soviet Union, and appeared to be on the path to a smooth transition. However, a combination of factors, both economic and political, resulted in the country reverting to a softer version of its earlier socialist system. As a consequence, today most of the industries are owned by the Government. Even the Banking industry that was earlier in private hands, has now reverted to state ownership.

The consequences of the above are a fallback to the earlier problems of state patronage, corruption, inefficiency, wastage, etc. Entreprenuership has taken a back seat, and bureaucracy has taken over. Inevitably, the situation has led to the country seeking help from outside, notably, Russia, that has extended it a loan of USD 2.00 billion, and the country also had a stand-by agreement with the IMF for USD 2.50 billion.

Belarus has a well-established agricultural and industrial base, and manufactures transport equipment, construction and mining equipment, chemicals, fertilizers, etc., and among its agricultural produce are wheat, oats, rye, flax, hemp, etc. Belarus imports much of its oil and gas from Russia, at a subsidized rate, but now Russia wants a better price for its oil and gas and a new agreement has been signed between the two countries in this regard, under which Belarus would be paying the same rate for Russian oil and gas as the European Union states in a few years’ time.

If the country gets its act together on the type of economic system suitable to it, and keeps its faith in it, it has a great potential for economic growth and development.

Mauritius economy: Better times ahead.

The Island nation of Mauritius, known for its sugarcane plantations, and tourism, is finding its way out of the recession. Tourism being the major source of foreign exchange, was hit by the declining arrivals of foreign tourists. Apart from tourism, the country earns foreign exchange from the export of sugar, textiles, clothing, and food products.

The Mauritian economy that had grown at 5% in the last few years, is expected to reach only 2.70% this year, according to forecasts of the country’s Monetary Policy Committee. The IMF had projected a growth rate of 2% for the country in 2009. The official projection of 2.70% growth is based on a smaller import bill this year on account of the fall in oil prices globally. Apart from imports of oil, the country sources its other requirements like foodstuffs, chemicals, machinery and equipment, mainly from India, and China, while it counts on France to pick up the bulk of its exported products.

China has now come to play an important role in the country’s economy, with the establishment of the China Trade Zone, that is expected to boost exports by about USD 200.00 million per annum. The balance of trade deficit is slowly narrowing with the fall in oil prices.

Restoration of the exports sector is vital for the Mauritian economy to grow and prosper. As a matter of fact, the upbeat mood in the French economy is a welcome sign for the Island nation, that can look forward to more offtake of its products from France now. But it may be a bit premature to celebrate, as the recession in Europe and elsewhere will take some time to subside, and their economies look up once again.

Finnish economy: Recovery in sight.

After being battered by the worst economic downturn in two decades, Finland is taking tentative steps towards a possible recovery. But it may take a couple of years before the country can breathe easy on this score.

The Finnish economy, heavily dependent on exports was badly affected by the drop of its export business on acount of declining demand for its products, overseas. Among the major exports of Finland are timber, pulp, paper, machinery, equipment, chemicals, metals, etc. And its imports include foodstuffs, beverages, oil, transport equipment, etc.

With the global recession hitting one and all in the pocket, overseas orders for Finnish products declined to a point where the contribution of the export sector to the GDP of the country was nearly halved to about 35%. As a consequence, investment went down, and unemployment up, and this in turn resulted ina drop in domestic consumption. A typical cycle of negative factors chasing one another.

It would appear that the Finnish establishment had not expected the recession to be so severe, and official figures about economic growth and development had to be revised more than once.

However, things may now be looking up for this country of pristine forests and the ubiquitous Nokia phone. According to the Research Institute of the Finnish Economy, the GDP for the year 2010 is set to rise by 1.5%. Exports, the life blood of the Finnish economy, are projected to pick up in 2010, and improve futher in 2011.

The enthusiasm of the Institute is shared by independent economists, who, in a recent radio interview conducted by the Finnish Broadcasting Company, expressed optimism about their economy. According to them, the economy should pick up steam in the last quarter of 2009. But given the fact that, Finland is heavily dependent on exports, there is still some uncertainty about a quick turnaround.

Dutch economy: More bad news.

The Dutch are good at defending themselves against the ravages of the sea, as they have been doing for long. However, they may need much more than such skills to defend themselves from the ravages of the economic crisis that they are facing as a fallout of the global crisis.

According to a recent statement of the Central Planning Agency, the Dutch economy is in for some rough weather in 2010, which is being dubbed as a “crisis year”. Even the Dutch Queen has warned of tough times ahead for the country. The present crisis is said to be the worst since the Great Depression of the 1930s.

Almost all the economic indicators show a downward trend. Production is down throuhout the year. Unemployment is climbing effortlessly, and is expected to hit the 8% mark next year. The Dutch Government is ready with its plans to counter the recession. One of the most significant steps taken is the initiatin of the economic stimulus package. Public spending is expected to soften the blow of the recession on the Dutch citizens.

On the flip side, however, these measures are likely to widen the budget deficit correspondingly. The Governmen’s infusion of massive funds to the tune of USD 50.00 billion to rescue its failing Banks have had a major impact on public finances. The public has had to pay for this through higher taxes.

The political establishment is keen to avoid imposing additional burdens on the people, as they have to face the electorate in a general election in 2011. So the Dutch Government appears to have adopted a strategy to initiate adhoc measures to keep the economy going till the elections are over, and thereafter come out with a reforms package that is likely to be painful for one and all.

Hopefully, things would not get worse by that time, necessitating a about turn in official thinking.

Bulgarian economy: Tough times ahead.

The Bulgarian economy has taken a serious beating, like the rest of the world, in the current economic crisis, and desperately trying to find its feet again.

Almost all the sectors of the Bulgarian economy are said to have fared poorly in the second quarter of fiscal 2009. The agricultural sector, as well as the industrial sector have recorded contractions, with the industrial sector outperforming the agricultural in negative growth. Exports have been hit badly, though the impact of this on the balance of payments situation is moderated to an extent on account of the fall in the imports on the other hand. However, the effect of reducing imports of essential items is likely to have its own adverse impact.

The overall contraction of the economy in the second quarter of 2009 is said to be around 5%, with consumption down, and joblessness up to record levels, and coupled with declining investment. Essentially, Bulgaria presents the typical picture of a country hit badly by the current recession, with a few local variations.

But the country hopes to come out of this recession, as the world economy is looking up, if one were to go by official pronouncements on this score, by various countries. Of special interest and concern to Bulgaria is the economic situation in France and Germany, two of its largest trading partners. The reported improvement in the economic situation in these two countries presents new opportunities for the Bulgarian economy.

Bulgaria has also initiated a new stimulus package to revive its economy, but the results of the same will take some time to come. That apart, the country is also examining the prospects of IMF funding for its economy, but that is likely to come with tough and unpopular conditionalities. The coming days and weeks are going to be a tough time for the Bulgarian people.

Ghana economy: Strugglijng to break free.

Ghana is one of the least developed countries of the world, where economic development has been inconsistent and hostage to natural, as well as, man made disasters over a period of time. And the current economic crisis afflicting the world at large, has also contributed to the problems of Ghana.

But slowly things are changing. The Government has embarked upona program of eocnomic stabilization with the help of the IMF. However, whether the IMF is the right partner in this venture, is open to question.

Ghana is an agricultural economy, and a major exporter of cocoa. Apart from that, it also produces a lot of bananas and gold. But a series of setbacks in the form of floods and drought in 2007, and followed by a “food and fuel” crisis in 2008, have had an adverse impact that Ghana is struggling to deal with.

The mid year budget review placed before the Parliament and accepted by it, highlighted the impact of the global economic crisis, the issues concerning Ghana’s public sector reforms, containing inflation, agricultural developments, especially the expected good harvest this season, social protection systems, the unemployment situation and such other issues.

Under the IMF stabilization program, the country has to achieve a inflation rate of 14.50% in fiscal 2009, in order to be eligible for further funding, but is widely believed to miss the target. The Parliament has adopted a strategy for growth with macroeconomic stability that is a desirable but difficult to achieve goal.

The challenge before Ghana is to achieve a balance between myriad competing priorities, among them, employment generation, inflation contraction, poverty alleviation, containing public debt, servicing interest on the debt, etc.

Typhoon hit Taiwan picks itself up.

The typhoon Morakot hit Taiwan hard. Physically, as well as economically. With nearly 150 deaths, and economic loss estimated to be around USD 3.00 billion, it is said to be the worst such natural calamity in the past fifty years.

Ironically enough, the Government’s special package of development for the typhoon hit areas, in the amount of USD 3.00 billion, the same as the amount of estimated damange from the typhoon, has cushioned the fall in the country’s GDP, in these days of economic recession worldwide.

While it is France and Germany in Europe, it is China, South Korea and Taiwan in Asia, that are coming out of recession, and contributing to global economic recovery. China occupies an important place in Taiwan’s life in more ways than one. It is the most important market for Taiwanese goods and services, followed by the United States. And both these countries have an ongoing economic stimulus package that is contributing to Taiwan’s growth, by providing it opportunities in their markets.

Taiwan’s major source of revenues are exports of various consumer electronics and other goods, and services, with China being a major purchaser of them. Recent weeks have seen a pick up in imports of China from Taiwan, that may not be dictated entirely on economic considerations. Taiwan, on its part is happy to be making money in the process.

However, all this good news means that Taiwan’s economy has contracted lesser than expected, rather than register real growth. While Taiwan’s economy is expected to grow by 5.5% in the last quarter of fiscal 2009, it is expected to register only 4.00% growth in 2010.

Is the worst over for the Taiwanese economy? That’s the opinion of many major players in Taiwan’s markets, but only time will tell how close they are to truth.

Nigerian economy looks up again.

Nigeria is one of those promising oil rich countries that have dazzled intermittently on the world economic scene, without giving a consistent performance.

Typical problems plaguing African economies, and legacy problems, have hindered the growth of this promising economy which is virtually the largest producer of oil in Africa. But decades of civil disturbances, corruption and scandal, and mismanagement, among other things, have never really allowed Nigeria to break out of the vicious circle, towards a more vibrant system of economic development.

Things are not looking up for Nigeria, with a good harvest contributing to economic growth. Quarterly growth of the economy in June 2009 was higher compared to previous quarter by over 60 points, ,mainly on account of agricultural production.

Nigeria, like other oil producers, has attempted, partially successfully, to diversity its economy by venturing into non oil sectors. According to statements attributed to the Nigerian Central Bank Chief, the non oil GDP growth is expected to be in the region of 5%, and overall growth in the region of 6%, in the second half of 2009, which is quite a decent figure, going by the current crisis situation.

But for the fact that Nigeria has had to bail out five Banks, a la U.S.A., by re-capitalizing them to the extent of Naira 400.00 billion, its economic growth would have been a notch or so higher.

All in all, it is a mixed bag for the Nigerian economy with the positives getting offset by the negatives to a large extent, and the economic enginge having to restart once again and gather momentum. Deft handling of the present economic crisis, and prudent economic management should see Nigeria through the crisis, with only scratches and bruises, rather than major injuries.

Unrealized potential of the Libyan economy.

The North African state of Libya, one of the largest producers of oil, the liquid gold, had burst on the international scene in the early 60’s after the discovery of oil, as a nation with great potential for economic development, not only of itself, but also for other countries in the region.

With a low population count, and high income from oil, it was expected to move rapidly up the economic ladder. Even though sincere efforts were made at the top level, the bureaucracy driven economy does not appear to have made much headway in the last thirty years.

Oil has been the mainstay of Libya’s economy, even though attempts at diversification of investment and production have not succeeded as per plans. The major reason given for this failure is the supposedly corrupt and inefficient bureaucracy. Of course, the drop in oil prices has badly hit Libya’s revenues. And coupled with the global recession, it has had a doubly severe effect.

The Libyan Government has been engaged, rather vainly, in the last few decades, to push the economy into the top bracket, but its confrontation with the West resulting in United Nations sanctions, had an adverse effect on Libya, in many ways, contributing to economic stagnation. With little agricultural activity, and mostly imported food and equipment, the foreign exchange kitty of the country is also under stress.

Libya had allocated about USD 75.00 billion for various infrastructure projects under its strategic plan for the period 2008-2012, but it is not sure how much of this allocated fund would be actually spent, in view of the fall in oil revenues, and the increasing import bill of the country.

The Libyan leader Muammar Gadhafi may have to really start a “revolution against corruption” to get things going in Libya towards economic prosperity.

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