Non OECD High Income

8/13/2019 Non OECD High Income

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Russian Federation

Russia also known officially as the Russian Federation is a country in northern

Eurasia. The country has an abundance of natural resources, particularly fossil

fuels. This also accounts for primary source of Russias economic growth. Since

the collapse of Soviet nion, Russia has gone through significant changes,

moving from centrally planned economy to market based economy. !n late "##$

and early "##%, Russia e&perienced the first recession after '# years of

e&periencing a rising economy. (ut the economy again started gaining stable

growth in late "##% and "#'#.!t became a member of )T* on ""nd+ug "#'". !t

also has a high -! #./$$0.

The country has gone through transitions dissolution in '%%' and devaluation in

'%%$. These two transitions played a ma1or role in e&plaining the changes which

occurred in the country.

Russia after being separated from SSR in '%%' started to follow the integrated

economy regime, as a result of which its 2-3 started increasing moving towards

a more competitive economy where e&ports and imports of goods and services

as 4 of 2-3 started increasing. !t can also be seen here that the inflow of F-!

also increased after liberali5ation and shot up after the recession to overcome it.

Then again the economy took a peak around '%%$ where the devaluation of the

rubble increased the value of e&ports, where the main components being oil and

natural gas. Since then the country has e&perienced positive growth in 2-3.

Then again in late "##$ countrys 2-3 saw a nose dive due to recession affecting

the whole world, but soon after the recession country recovered from it because

of short term macroeconomic policies.

2-3 3er 6apita current S 70

E&ports 8 !mports of goods and services 42-30


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Agriculture, industry and services contribution in Russian economy:

From being an agrarian economy Russias growth is now supported by its

industrial 8 services sector, ma1or e&port items in agriculture being wheat,

barley, corn, fishes, and oilseeds. The share of agriculture has been constantly

declining at a slow pace after '%%', as the e&pected trend in developing

countries. Soon after the opening of the economy, agriculture share declined

drastically from '94 to /4. Russia basically has a very strong industrial sector

mainly inherited from being a state economy earlier. The mining and e&tractive

industries share a ma1or role in industrial sector growth including aircrafts anddefence items. The industrial sector has not shown any drastic decline or growth

during the period after liberalisation. This is because the country has a strong

capital base which has been supporting in the growth of the economy. Services

sector took off in the period around '%%:. The share of services sector also has

followed a positive trend, contributing almost :#4 in "#'', the highest

contributor in 2-3.


3/26

Value Added by Agriculture, Industry & services sector (%GDP)

The movement of labour has been from industry to services, because of slow

ad1ustment in agriculture labour. The Total Factor 3roductivity is higher for

industry than for any other sector despite the fact that other sectors were

contributing more to the 2-3. Even when the labour started moving to other

sectors the factor productivity of industrial sector did not decline. From '%%#;

'%%% labour productivity decreased in every sector but in industry it still

continued to increase. !n fact pre transition this sector grew two times faster

than other sectors. (y "##9 again the labour productivity increased and services

sector growth also increased. -uring this period the transition effect also became

positive with growth. igh growth in other sectors overcompensated for the

declining growth in industrial sector. The strong presence of industrial sector can

also be attributed to the >www.worldbank.org

http=>>www.econ.yale.edu>growth?pdf>cdp$%:.pdf

http=>>eaces.liuc.it>'$"9"%/%"##$#">'$"9"%/%"##$#@#"#9.pdf
http://www.worldbank.org/http://www.econ.yale.edu/growth_pdf/cdp896.pdfhttp://eaces.liuc.it/18242979200802/182429792008050204.pdfhttp://www.worldbank.org/http://www.econ.yale.edu/growth_pdf/cdp896.pdfhttp://eaces.liuc.it/18242979200802/182429792008050204.pdf


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5/26

Singapore

Ranked as the Amost openB in the world, least corrupt,most pro;business,with

low ta& rates '9."4 of 2-30,Singapore has one of the highest per;capita grossdomestic products in the world. !t owes its success to a highly developed trade;

oriented market .!t is a ma1or F-! outflow financier and has benefited immensely

from the inflow of F-! as a result of the attractive investment climate it provides.

+fter its separation from Calaysia in '%:@, Singapore was left with a dearth of

natural resources, a small domestic market, and high levels of unemployment

and poverty. nemployment averaged '9 percent, 2-3 per capita was less than

7",/##, and half of the population was illiterate.To remedy this,the Singapore

2overnment adopted a pro;worker, pro;business, pro;foreign investment, e&port;

oriented economic policy. !nitially the government re1ected free marketorthodo&y, however after discovering that the former led to greater growth they

decided to adopt their current capitalist model. owever unlike the economic

policies of 2reece and the rest of Europe, Singapore followed a policy of

individuali5ing the social safety net. This led to higher than average savings rate

and a very sustainable economy in the long run.Thus Singapore has managed to

combine the benefits of a welfare econmy along with the efficiency associated

with a capitalist economy.

!t is clearly evident from the graph, that the 2-3 of Singapore has been rising

consistently e&cept for a few years in '%%% and "##D. Singapores economic

strategy produced real growth averaging $.#4 from '%:# to '%%%. The economy

picked up in '%%% after the regional financial crisis, with a growth rate of @.94,

followed by %.%4 for "###. owever, the economic slowdown in the nited

States, apan and the European nion, as well as the worldwide electronics

slump, had reduced the estimated economic growth in "##' to a negative ".#4.

The economy e&panded by "."4 the following year, and by '.'4 in "##D when

Singapore was affected by the S+RS outbreak. Subse


6/26

E&ports, particularly in electronics such as Fle&tronics0 ,chemicals and services

are the main source of revenue for the economy, which allows it to

purchase natural resources and raw goods which it does not have. Singapore

thus relies on intermediary trade , by purchasing raw goods and refining them

for re;e&port, such as in the wafer fabrication industry and oil refining. !t has a

strategic port which gives it a competitive edge over its neighbours in carrying

out such activities. Singapore has the highest trade to 2-3 ratio in the world,

averaging around 9##4 during "##$;''.

Canufacturing and financial business services accounted for ":4 and ""4,

respectively, of Singapores gross domestic product in "###. The electronics

industry leads Singapores manufacturing sector, accounting for 9$4 of total

industrial output.Coreover the government also is prioritising development of

the chemicals and biotechnology industries.To maintain its competitive position

despite rising wages, the government seeks to promote higher value;added

activities in the manufacturing and services sectors. !t is also in the process of

opening up the financial services, telecommunications, and power generation

and retailing sectors up to foreign service providers. The government has also

attempted some measures including wage restraint measures and release of

unused buildings in an effort to control rising commercial rents with the view to

lowering the cost of doing business in Singapore.

Singapore also has a highly skilled workforce due to the successful

implementation of the countrys education policy .The government promotes

high levels of savings and investment through policies such as the 6entral

3rovident Fund, which is used to fund its citi5ens healthcare and retirement

needs. Singapores savings rates have continued to remain among the highest in

the world since the '%/#s.

The graph above supports the view that e&port of goods and services have

become increasingly important in the economic growth of Singapore.


7/26

(oth the above graphs are indicative of the structural transformation of

Singapore. Structural transformation refers to the reallocation of economic

activity across the broad sectors agriculture, manufacturing and services.+s an

economy grows,the focus shift from agriculture to the manufacturing,services

and in certain cases the e&ternal sector.+griculture is generally perceived asone of the less productive sectors and thus structural transformation usually

entails the movement of labour away from the less productive sector i.e.

agriculture to the more productive sectors,which couls be

manufacturing,services or the e&ternal sector.This can be clearly understood

from te above graphs.

Sources;

http=>>www.tradingeconomics.com>singapore>gdp

http=>>databank.worldbank.org>data>views>reports.asp&

http=>>www.mongabay.com>reference>country?studies>singapore>E6*G*CH.html
http://www.tradingeconomics.com/singapore/gdphttp://databank.worldbank.org/data/views/reports.aspxhttp://www.mongabay.com/reference/country_studies/singapore/ECONOMY.htmlhttp://www.tradingeconomics.com/singapore/gdphttp://databank.worldbank.org/data/views/reports.aspxhttp://www.mongabay.com/reference/country_studies/singapore/ECONOMY.html


8/26

http=>>en.wikipedia.org>wiki>Economy?of?Singapore

http=>>www.nber.org>papers>w'$%%:.pdf
http://en.wikipedia.org/wiki/Economy_of_Singaporehttp://www.nber.org/papers/w18996.pdfhttp://en.wikipedia.org/wiki/Economy_of_Singaporehttp://www.nber.org/papers/w18996.pdf


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Puerto Rico Economic Structure

+ S 6ommonwealth nation, 3uerto Rico controls only its internal affairs while

the S federal government controls all interstate and international trade

relations. The country has en1oyed fiscal autonomy under Section %D: of the S

!nternal Revenue 6ode, in force from '%/: to "##:, which e&empted companies

from paying .S. corporate ta&es on profits earned from sales of items produced

in 3uerto Rico. The residents of 3uerto Rico do not pay federal income ta&es, and

the local authorities have discretion to design ta& incentives to attract foreign

direct investment. This ma1or tool has allowed 3uerto Rico to develop the

manufacturing and services sectors of the economy in a fairly short amount of

time.

From an agrarian economy, based primarily on sugar, tobacco, and coffee

products, 3uerto Rico is now a thriving modern industrial and services oriented

economy. !n '%9#, agriculture represented DD./ percent of total net income,while manufacturing had '".$ percent of the total. !n "#'' value added by

agriculture was #.:$ percent of 2-3, while manufacturing added 9$.: percent

and services added 9%.D percent of 2-3.


10/26

Canufacturing sector has gradually changed from being labour;intensive to

being a capital;intensive sector. !n '%$# the !ndustry sector provided ":."4 of

the total employment, whereas in "#'' it employed only 'D.@4 of the total

employed population. +t the same time value added by !ndustry as a

percentage of 2-3 has grown steadily over the years from DD.$@4 in '%:: to

almost @#4 in "#''. Top industries in terms of value added are sophisticated

and capital intensive industries such aschemical manufactures, computer and

electronic product manufacturing, beverage and tobacco products manufacture,

processed foods food manufacturing0. US Census Bureau Island Areas Data0

Share of employment in the service sector has increased over the years however

value added by services as a percentage of 2-3 has shown a downward trend in

the recent years. Tourism has traditionally been an important source of income

for the island. !n "#'' it contributed S- @.%'$ billion to the countrys 2-3

almost :4 of the 2-30. Gearly D million tourists arrived in "#'' and the tourism

industry employed over @@,### people in "#''.

Statistics show that the 2-3 is growing much more rapidly than the population,

and 3uerto Ricos 2-3 per capita is one of the highest 6aribbean !sland nations.

3uerto Rico has also emerged as a net e&porter of goods and services. Share of

E&ports of goods and services0 as a percentage 2-3 has increased from @".D

percent in '%:# to /% percent in "#''.


11/26

Sources I

ason (ram, Francisco E. CartJne5 and 6harles Steindel, KTrends and

-evelopments in the Economy of 3uerto Rico Lolume '9, Gumber ", Federal

Reserve (ank of Gew Hork, Carch "##$

)orld Travel and Tourism 6ouncil, KTravel and Tourism Economic !mpact ;"#'"

3uerto Rico, "#'"

)orld (ank, )-! database, http=>>databank.worldbank.org>data>home.asp&

http=>>www.economywatch.com>world?economy>puerto;rico>structure;of;

economy.html

http=>>www.topuertorico.org>economy.shtml

http=>>www.newyorkfed.org>research>current?issues>ci'9;">ci'9;".html

http=>>www.wttc.org>research>economic;impact;research>country;reports>

http=>>www.gdb;pur.com>economy>fact;sheet.html

http=>>factfinder".census.gov>faces>tableservices>1sf>pages>productview.&htmlM

srcNbkmk
http://www.newyorkfed.org/research/economists/bram/index.htmlhttp://www.newyorkfed.org/research/economists/steindel/index.htmlhttp://databank.worldbank.org/data/home.aspxhttp://www.economywatch.com/world_economy/puerto-rico/structure-of-economy.htmlhttp://www.economywatch.com/world_economy/puerto-rico/structure-of-economy.htmlhttp://www.topuertorico.org/economy.shtmlhttp://www.newyorkfed.org/research/current_issues/ci14-2/ci14-2.htmlhttp://www.wttc.org/research/economic-impact-research/country-reports/http://www.gdb-pur.com/economy/fact-sheet.htmlhttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmkhttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmkhttp://www.newyorkfed.org/research/economists/bram/index.htmlhttp://www.newyorkfed.org/research/economists/steindel/index.htmlhttp://databank.worldbank.org/data/home.aspxhttp://www.economywatch.com/world_economy/puerto-rico/structure-of-economy.htmlhttp://www.economywatch.com/world_economy/puerto-rico/structure-of-economy.htmlhttp://www.topuertorico.org/economy.shtmlhttp://www.newyorkfed.org/research/current_issues/ci14-2/ci14-2.htmlhttp://www.wttc.org/research/economic-impact-research/country-reports/http://www.gdb-pur.com/economy/fact-sheet.htmlhttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmkhttp://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk


12/26

Croatia

The Republic of 6roatia is a unitary democratic parliamentary republic situated in

Europe .!t is an open economy which is largely connected to other foreign

markets. !ts 2-3 per capita current S70 is 'D,"%#, making it a high incomecountry, according to )orld (ank classification.

For the 6roatian Economy, until )orld )ar ', the crafts;manufacturing stage,

until '$/# and the railroad stage, from appro&imately '$/# to '%'$ signify the

initial incorporation of the industrial revolution in the alteration of the traditional

agrarian economy. -uring the '$/#s only '",### people were engaged in large;

scale manufacturing. +ccording to '%'# census, there were only 9',###

industrial workers. First industrial plants were based only on the e&ploitation of

natural wealth lumber and food processing industries0 and use of cheap labour

force which e&panded during the process of de;agrarianisation labour;intensive

industries= te&tiles, footwear, and partially metal production0. Slowly the processof industriali5ation began to e&pand from the larger cities to the countryside.

Even then prior to )orld )ar !!, peasants comprised more than half of 6roatias

population and the countrys economy was based largely on agriculture and

livestock.

!ndustriali5ation became dominant after )orld )ar !! when 6roatia became a

part of the Socialist Federal Republic of Hugoslavia. -uring this time, the

economy diversified, industry and trade grew rapidly, and tourism developed

swiftly. + planned socialist system '%9@;'%%#0 brought in a very intensive

process of change in the basic professional structure industriali5ation and de;agrariani5ation0, as well as the spatial arrangement of settlement de;ruralisation

and urbani5ation0 (iland5ic '%/$0.

6roatia bid for independence in '%%#. !t was met with military force by the

Hugoslavian government, unleashing a war that lasted from '%%' to '%%@. (ut

the war hap a serious impact on the 2-3 of the country which fell from

7"9/$"':D'/9.99:' in '%%# to 7'9@/$D$:%:".D"#$ in '%%9. The economy

started recovering after war.


13/26

!t again fell in the '%%% crisis and the "##$ crisis.

The first private accumulations of capital developed most


14/26

!t can be concluded that 6roatia underwent through a shift from an agrarian to

services oriented economy, with a base moderate industrial base. The shift from

agriculture to services has been in terms of both value added and population.

(ibliography=

AThe development and structure of the 6roatian economyB by -ragutin Feletar3h.-., Ooran Stiperski 3h.-.

http=>>data.worldbank.org>

http=>>www.nationsencyclopedia.com>economies>Europe>6roatia;*LERL!E);*F;

E6*G*CH.html
http://link.springer.com/search?facet-author=%22Dragutin+Feletar+Ph.D.%22http://link.springer.com/search?facet-author=%22Dragutin+Feletar+Ph.D.%22http://link.springer.com/search?facet-author=%22Zoran+Stiperski+Ph.D.%22http://data.worldbank.org/http://www.nationsencyclopedia.com/economies/Europe/Croatia-OVERVIEW-OF-ECONOMY.htmlhttp://www.nationsencyclopedia.com/economies/Europe/Croatia-OVERVIEW-OF-ECONOMY.htmlhttp://link.springer.com/search?facet-author=%22Dragutin+Feletar+Ph.D.%22http://link.springer.com/search?facet-author=%22Dragutin+Feletar+Ph.D.%22http://link.springer.com/search?facet-author=%22Zoran+Stiperski+Ph.D.%22http://data.worldbank.org/http://www.nationsencyclopedia.com/economies/Europe/Croatia-OVERVIEW-OF-ECONOMY.htmlhttp://www.nationsencyclopedia.com/economies/Europe/Croatia-OVERVIEW-OF-ECONOMY.html


15/26

Uruguay

ruguay officially the *riental Republic of ruguay and sometimes called

the Eastern Republic of ruguay is a country in the southeastern part of South

+merica. R2+H !S + )E+PTH 6*GTRH by Patin +merican standards,

although its economic development has been sluggish since the '%@#s. !n '%%#

the country had a gross domestic product 2-30 of appro&imately S7%." billion,

or S7",%/# per capita, placing it among the highest;income countries in Patin

+merica. ruguays small population 1ust over D million0 and low population

growth #./ percent per year0 enabled its people to maintain a reasonable

standard of living during the '%$#s, despite the nations unsteady economic

performance. Pike many other countries in the region, ruguay faced a large

e&ternal debt and an appreciable public;sector deficit, both of which impeded the

growth of the economy. *ther ma1or limitations on growth were the continued

dependence on a few agricultural products and one of South +mericas lowest

levels of foreign and domestic investment.

+griculture played a central role in ruguays economy. !n '%$$ agricultural

activity including fishing0 directly generated 'D percent of 2-3 and provided

over half the value of e&ports. !ndirectly, agriculture was responsible for a much

higher proportion of both 2-3 and e&ports. Cany of ruguays most dynamic

manufacturing enterprises;;such as its tanneries and te&tile mills;;depended on

agricultural inputs. The close relationship between agriculture and

manufacturing had a significant impact on ruguays economic development. !n"#'#, ruguays e&port;oriented agricultural sector contributed to %.D4 of the

2-3 and employed 'D4 of the workforce. +griculture produces /#4 of

ruguayan e&ports. (eef, soybeans, cellulose, rice, wheat, wood, dairy products

and wool are the ma1or e&port products of ruguay.

ruguays industries,

including construction,

mining, and energy,

generated DD percent

of 2-3 in '%$$. These

industries underwentmost of their

development behind

high tariff barriers in
http://en.wikipedia.org/wiki/South_Americahttp://en.wikipedia.org/wiki/South_Americahttp://en.wikipedia.org/wiki/South_Americahttp://en.wikipedia.org/wiki/South_America


16/26

the '%@#s. +s a conse


17/26

Sources=

1.

http://$tended &ational 'ousehold urvey 200": *ncestry+

2http=>>www.heritage.org>inde&>country>uruguay

3.http=>>internationalliving.com>countries>uruguay>the;economy;in;uruguay>

9. http=>>www.mongabay.com>reference>country?studies>uruguay>E6*G*CH.html

@. http=>>databank.worldbank.org>data>home.asp&
http://www.heritage.org/index/country/uruguayhttp://www.heritage.org/index/country/uruguayhttp://internationalliving.com/countries/uruguay/the-economy-in-uruguay/http://www.mongabay.com/reference/country_studies/uruguay/ECONOMY.htmlhttp://databank.worldbank.org/data/home.aspxhttp://www.heritage.org/index/country/uruguayhttp://internationalliving.com/countries/uruguay/the-economy-in-uruguay/http://www.mongabay.com/reference/country_studies/uruguay/ECONOMY.htmlhttp://databank.worldbank.org/data/home.aspx


18/26

Lithuania

ocation: Eastern Europe, bordering the (altic Sea, between Patvia and Russia

Geogra!"ic #oordinates: @: ## G, "9 ## E

Area: :@,D## s< kmland= :",:$# s< kmQ water= ",:"# s< km0

and $oundaries: ',@/9 km (elarus :$# km, Patvia @/: km, 3oland %' km,Russia aliningrad0 ""/ km0

Pithuania is a member of the European nion and the biggest economy among

three (altic states Pithuania was the first occupied Soviet republic to break free

from the Soviet nion and restore its sovereignty via the declaration of

independence on '' Carch '%%#.

2-3 per capita in Pithuania is /#4 above the worlds average of S7'#,@##.Pithuania has a favourable legislative basis for business as the country is rankedthe Drd in the region of Eastern Europe and 6entral +sia and the ":th in theworld by the Ease of -oing (usiness !nde&prepared by the )orld (ank 2roup.Pithuania is ranked the D#th out of '/% countries in the !nde& of EconomicFreedom, measured by The eritage Foundation. +ccording to the uman-evelopment Report "#'', Pithuania belongs to the group of very high humandevelopmentcountries.

The economy of Pithuania was one of the astest groing in t"e orld last

decade '%%$I"##$0 as 2-3 growth rate was positive % years in a row. The

accession to the )T*in "##' and the E in "##9, which enabled free movement

of the labour force, capital and trade between the Cember State resulted in

substantial economic e&pansion, , leading to the notion of a (altic Tiger. 6urrent

e&cellent telecommunication infrastructure and well;educated, multilingual

workforce give the possibility to provide high


19/26

The global credit crunchwhich started in "##$ affected the real estate and retailsectors. The construction sector shrank by 9:.$4 during the first D


20/26

+griculture in Pithuania formed the basis of the Pithuanias economy in '%9#.Core than half of the labor force of Pithuania was engaged in agricultural work.Fifty years later, agriculture of Pithuania still continued to play a crucial role inthe economy of the country. +lthough in the transitional period its share in 2-3has fallen from "/4 in '%%# to D.D4 in "#'". + rapid privatisation coupled withthe restitution of property rights on land has led to a strongly disaggregatedownership structure, resulting in low productivity. -espite a decreased share in2-3, the agricultural sector is still important for Pithuania as it employs almost

$4 of the work force and supplies materials for the food processing sector.99.$4 of the land is arable. Total crop area was '.$ million hectares in "##$.6ereals, wheat and triticaleare the most popular production of farms.

-uring the period of Soviet control of Pithuania, the government tried to change

the economy from one based on agriculture to one based on industry. owever,

in the post;Soviet era, industry has declined significantly in relation to the other

segments of the economy. Pithuanias industrial sector produced almost @'

percent of 2-3 in '%%', but industrial production has subse


21/26

!nternational tradefor such a small country as Pithuania is crucial. The ratio offoreign trade to 2-3 has always been at least '##4, and for the last severalyears e&ceeded it.

The E is the biggest trade partner of Pithuania with a @$4 of total imports and

:94 of total e&ports during the first ten months of the year "##%. The

6ommonwealth of !ndependent States is the second economic union that

Pithuania trades the most with, with a share of imports of D94 and a share of

e&ports of "D4 during the same period

Some sectors are directed mainly at e&port markets. Transport and logisticse&port ">D of their products and>or servicesQ the biotechnologyindustry e&ports$#4Q plastics e&port @"4Q laser technologies e&port $:4Q metal processing,machinery and electric e>databank.worldbank.org>data>home.asp&

http=>>www.mongabay.com>reference>country?studies>lithuania>E6*G*CH.html

http=>>www.mapsofworld.com>lithuania>economy;and;business>

http=>>ec.europa.eu>economy?finance>een>##">article?9#/D?en.htm

http=>>globaledge.msu.edu>countries>lithuania>economy

http=>>www.nationsencyclopedia.com>economies>Europe>Pithuania;E6*G*C!6;

SE6T*RS.html

2*LERGCEGT *F TE RE3(P!6 *F P!T+G!+,ER*3E+G 6*CC!SS!*G,

-!RE6T*R+TE 2EGER+P F*R E6*G*C!6 +G- F!G+G6!+P +FF+!RS= oint

+ssessment of Pithuanias Economic 3olicy 3riorities
http://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Commonwealth_of_Independent_Stateshttp://en.wikipedia.org/wiki/Biotechnologyhttp://en.wikipedia.org/wiki/Laserhttp://en.wikipedia.org/wiki/Wood_processinghttp://databank.worldbank.org/data/home.aspxhttp://www.mongabay.com/reference/country_studies/lithuania/ECONOMY.htmlhttp://www.mapsofworld.com/lithuania/economy-and-business/http://ec.europa.eu/economy_finance/een/002/article_4073_en.htmhttp://globaledge.msu.edu/countries/lithuania/economyhttp://www.nationsencyclopedia.com/economies/Europe/Lithuania-ECONOMIC-SECTORS.htmlhttp://www.nationsencyclopedia.com/economies/Europe/Lithuania-ECONOMIC-SECTORS.htmlhttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Commonwealth_of_Independent_Stateshttp://en.wikipedia.org/wiki/Biotechnologyhttp://en.wikipedia.org/wiki/Laserhttp://en.wikipedia.org/wiki/Wood_processinghttp://databank.worldbank.org/data/home.aspxhttp://www.mongabay.com/reference/country_studies/lithuania/ECONOMY.htmlhttp://www.mapsofworld.com/lithuania/economy-and-business/http://ec.europa.eu/economy_finance/een/002/article_4073_en.htmhttp://globaledge.msu.edu/countries/lithuania/economyhttp://www.nationsencyclopedia.com/economies/Europe/Lithuania-ECONOMIC-SECTORS.htmlhttp://www.nationsencyclopedia.com/economies/Europe/Lithuania-ECONOMIC-SECTORS.html


22/26


23/26

Latvia

ThePatvian economy which is an open economy in Gorthern Europe is part of

the European nions E0 single market. Patvia is a member of the )orld Trade

*rgani5ation )T*0 since '%%%, and a member of the European nion since

"##9. +ccording to the uman -evelopment Report "#'', Patvia belongs to the

group of very high human development countries. -ue to its geographical

location, transit services are highly;developed, along with timber and wood;

processing, agriculture and food products, and manufacturing of machinery and

electronic devices.

The Republic of Patvia was founded on Govember '$, '%'$, however, its

independent status was interrupted at the outset of )orld )ar !! when in '%9#,

the country was forcibly incorporated into the Soviet nion, invaded and

occupied by Ga5i 2ermany in '%9', then re;occupied by the Soviets in '%99 to

form the Patvian SSR for the ne&t fifty years. The peaceful SingingRevolution starting in '%$/ called for (altic emancipation of Soviet rule, it ended

with the dissolution of the Soviet nion in '%%' and Patvia declared the

restoration of its de factoindependence on +ugust "', '%%'.

The Patvian economy began to falter in '%%' and took a nosedive in '%%".!ndustrial production declined and especially hard hit was the engineering

industry, which was not able to sell most of its production. !nternational trade

also plummeted as most of the trade with the former Soviet republics was

conductedusing world prices. *ne of the key areas of change is in the price of

energy, which increased seventy;five times between '%%# and '%%". The

average prices of imports in these two years increased forty;five times, whereas

prices of e&ports increased only about thirty;three times. )ith such price hikes

and the general economic chaos prevailing in the whole post;Soviet region,

e&ports in the '%%#;%" period decreased by 99 percent, imports by @% percent,

and energy imports by @" percent. owever after the introduction of the freetraded currency lat ,there was moderate improvement in '%%D and the economy

steadied in late '%%9, led by recovery in light industry and a boom in commerce

and finance. This recovery was interrupted twice, first by a banking crisis and the


24/26

bankruptcy of Banka Baltija, Patvias largest bank, in '%%@ and second by a

severe crisis in the financial system of neighbouring Russia in '%%$. +fter "###,

Patvian 2-3 grew and till the middle of "##$, Patvia was the fastest developing

economy in Europe.The Financial 6risis of "##$ severely disrupted the Patvian

economy, primarily as a result of the easy credit bubble that began building up

during "##9. The bubble burst lead to a rapidly weakening economy, resulting in

a budget, wage and unemployment crisis.'9Patvia had the worst economic

performance in "##%, with annual growth rate averaging U'$4. owever, by"#'# with Patvias policy of internal devaluation, the economic situation

improved and by "#'" Patvia was definitely out of the crisis, showing strong

growth forecasts. The Patvian economy grew by @.@4 in "#'' and by @.:4 in

"#'" reaching the highest rate of growth in Europe.

+griculture, Services and !ndustry contributions to the Patvian economy

The years following )orld )ar !! saw a shift in Patvias ma1or economic activity

from agriculture and toward Soviet;style heavy industry. !n '%%#, agriculture

accounted for "" percent of the 2-3 while industry comprised almost 9: percentand servicesVincluding transportation, communication, and constructionVwere

around D" percent. +fter independence, the shift from the socialist system and

restructuring period in the early '%%#s yielded a remarkable change from an

industry;based economy to a services;based economy. (y '%%$ agriculture

contributed only 9 percent of the 2-3, while industry contributed "$ percent and

services contributed :$ percent.
http://en.wikipedia.org/wiki/Economy_of_Latvia#cite_note-14http://en.wikipedia.org/wiki/Economy_of_Latvia#cite_note-14


25/26

Canufacturing sector is slowly changing from being labour;intensive to being a

capital;intensive sector. !n '%%: the !ndustry sector provided "/."4 of the total

employment, whereas in "#'" it employed "D."4 of the total employed

population. Top industries in terms of value added are capital intensive

industries such as pharmaceutical industries, timber and wood processing,

processed foods food manufacturing0.The timber industry is the nations main

e&porter of merchandise. )hile its share has fallen compared to levels '# years

ago, the timber industry still accounts for around '@4 of total e&ports of goods

and services

Share of employment in the service sector has increased over the years as value

added by services as a percentage of 2-3 has shown a upward trend from the

early '%%#s. !n '%%:,the services industry provided @@.94of the total

employment which has grown to ::.:%4 in "#'".+ncillary services for transport

and logistics is an increasing important employment source for Patvia as the

value added by transport sector makes up around '9 4 of the 2-3.

The "##$ crisis has structurally changed the Patvian economy, putting it more in

balance and shifting from domestic consumption to e&ports. +fter a sharp fall,


26/26

Patvia has now returned to the path of growth for some time. The e&port of

goods and services which was the main driver in early '%%#s retained its roll in

"#'' as well after Patvia came out of recession.

Patvias economic development in the future will be closely linked to e&port

opportunitiesQ therefore the greatest risk to Patvias growth is linked to

development in the global economy. +s growth rates slow for its main trading

partners, the growth of Patvias e&ports may moderate and affect Patvias

economic development.

Sources=

)orld (ank, )-! database, http=>>databank.worldbank.org>data>home.asp&

http=>>www.nationsencyclopedia.com>economies>Europe>Patvia

http=>>www.mongabay.com>reference>country?studies>latvia>E6*G*CH.html

http=>>en.wikipedia.org>wiki>Economy?of?Patvia

http=>>baltice&port.com>MarticleNlatvi1as;ekonomika
http://databank.worldbank.org/data/home.aspxhttp://www.nationsencyclopedia.com/economies/Europe/Latviahttp://www.mongabay.com/reference/country_studies/latvia/ECONOMY.htmlhttp://en.wikipedia.org/wiki/Economy_of_Latviahttp://balticexport.com/?article=latvijas-ekonomikahttp://databank.worldbank.org/data/home.aspxhttp://www.nationsencyclopedia.com/economies/Europe/Latviahttp://www.mongabay.com/reference/country_studies/latvia/ECONOMY.htmlhttp://en.wikipedia.org/wiki/Economy_of_Latviahttp://balticexport.com/?article=latvijas-ekonomika

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