Economy of Guinea-Bissau

Guinea-Bissau is among the world's least developed nations and one of the 10 poorest countries in the world, and depends mainly on agriculture and fishing. Cashew crops have increased remarkably in recent years, and the country now ranks sixth in cashew production. Guinea-Bissau exports fish and seafood along with small amounts of peanuts, palm kernels, and timber. License fees for fishing provide the government with some revenue. Rice is the major crop and staple food.

Macro-economic trend

This is a chart of trend of gross domestic product of Guinea-Bissau at market prices estimated [ [http://www.econstats.com/IMF/IFS_Gui2_99B__.htm#Year Guinea_Bissau - Gross Domestic Product (GDP) ] ] by the International Monetary Fund and EconStats with figures in millions of CFA Francs.

Current GDP per capita of Guinea-Bissau grew just 3.40% in the turbulent 1970s and reached a peak growth of 71% in the 1980s. But this proved unsustainable and it consequently shrank by 34% in the 1990s. Average wages in 2007 hover around $1-2 per day. [ [http://earthtrends.wri.org/text/economics-business/variable-638.html GDP: GDP per capita, current US dollars ] ]

Intermittent fighting between Senegalese-backed government troops and a military junta destroyed much of the country's infrastructure and caused widespread damage to the economy in 1998; the civil war led to a 28% drop in GDP that year, with partial recovery in 1999. Agricultural production is estimated to have fallen by 17% during the conflict, and the civil war led to a 28% overall drop in GDP in 1998. Cashew nut output, the main export crop, declined in 1998 by an estimated 30%. World cashew prices dropped by more than 50% in 2000, compounding the economic devastation caused by the conflict. Real GDP has steadily grown at an average of 2.3% from 2003 onwards.

Before the war, trade reform and price liberalization were the most successful part of the country's structural adjustment program under IMF sponsorship. The tightening of monetary policy and the development of the private sector had also begun to reinvigorate the economy. Under the government’s post-conflict economic and financial program, implemented with IMF and World Bank input, real GDP recovered in 1999 by almost 8%. In December 2000 Guinea-Bissau qualified for almost $800 million in debt-service relief under the first phase of the enhanced HIPC initiative and is scheduled to submit its Poverty Reduction Strategy Paper in March 2002. Guinea-Bissau will receive the bulk of its assistance under the enhanced HIPC initiative when it satisfies a number of conditions, including implementation of its Poverty Reduction Strategy Paper.

Because of high costs, the development of petroleum, phosphate, and other mineral resources is not a near-term prospect. It produces 400,000 barrels/day of petrol.

Income from waste dumping

In the 1980's Guinea-Bissau was part of a trend in the African continent toward the dumping of waste as a source of income. Plans to import toxic waste from Europe were cancelled after an international campaign to halt the trade. [cite news
last = Brooke
first = James
coauthors =
title = African Nations Barring Foreign Toxic Waste
work =
pages =
publisher = The New York Times
date = 1988-09-25
url = http://query.nytimes.com/gst/fullpage.html?res=940DE1D91738F936A1575AC0A96E948260&sec=&spon=&pagewanted=all
accessdate = 2008-03-25 ] The government was offered a contract to dispose of 15 million tons of toxic wastes over a 15 year period. The income from it was equivalent to twice the value of its external debt. After strong pressure from other African countries and environmental groups the Guinea-Bissau government renounced the deal. [cite book
last = Friman
first = H. Richard
authorlink =
coauthors = Peter Andreas
title = The Illicit Global Economy and State Power 
publisher = Rowman and LIttlefield
date = 1999
location = Maryland, United States
pages =
url =
doi =
id =
isbn = 0-8476-9303-1]

References

External links

*dmoz|Regional/Africa/Guinea-Bissau/Business_and_Economy/Economic_Development
* [http://www.guinea.aha.ru/guinea_bissau.htm Mineral resources of Guinea-Bissau]