South Korea at a glance

Capital: Seoul
Population: 48,379,392 (July 2008 est.)
Government Type: Republic

GDP: $1.206 trillion
Imports: $349.6 billion f.o.b.
Exports: $379 billion f.o.b.

South Korea’s population is one of the most ethnically and linguistically homogeneous in the world. Except for a small Chinese community (about 20,000), virtually all Koreans share a common cultural and linguistic heritage. With 48.38 million people, the Republic of Korea (commonly known as “South Korea”) has one of the world’s highest population densities. Major population centers are located in the northwest and southeast, and in the plains south of the Seoul-Incheon area.

Half of the population actively practices religion. Among this group, Christianity (49%) and Buddhism (47%) are South Korea’s two dominant religions. Though only 3% identify themselves as Confucianists, South Korean society remains highly imbued with Confucian values and beliefs. The remaining 1% of the population practice Shamanism (traditional spirit worship) and Chondogyo (”Heavenly Way”), a traditional religion.

South Korea is a republic with powers nominally shared among the presidency, the legislature, and the judiciary, but traditionally dominated by the president. The president is chief of state and is elected for a single term of 5 years. The 299 members of the unicameral National Assembly are elected to 4-year terms; elections for the assembly were held on April 9, 2008. South Korea’s judicial system comprises a Supreme Court, appellate courts, and a Constitutional Court. The judiciary is independent under the constitution. The country has nine provinces and seven administratively separate cities–the capital of Seoul, along with Busan, Daegu, Daejeon, Gwangju, Incheon and Ulsan. Political parties include the Grand National Party (GNP), Democratic Party (DP), Liberal Forward Party (LFP), Creative Korea Party (CKP), and Democratic Labor Party (DLP). Suffrage is universal at age 19 (lowered from 20 in 2005).

U.S. - South Korean Relations

The United States believes that the question of peace and security on the Korean Peninsula is a matter for the Korean people to decide. Under the 1953 U.S.-Republic of Korea Mutual Defense Treaty, the United States agreed to help South Korea defend itself against external aggression. Since that time in support of this commitment, the United States has maintained military personnel in South Korea, including the Army’s Second Infantry Division and several Air Force tactical squadrons. To coordinate operations between these units and the South Korean armed forces, a Combined Forces Command (CFC) was established. Several aspects of the security relationship are changing as the United States moves from a leading to a supporting role. In 2004, agreement was reached on the return of the Yongsan base in Seoul — as well as a number of other U.S. bases — to South Korea and the eventual relocation of all U.S. forces to south of the Han River. U.S. troops are being redeployed from South Korea, as well.

As South Korea’s economy has developed, trade and investment ties have become an increasingly important aspect of the relationship between the two counties. South Korea is the United States’ seventh-largest trading partner (ranking ahead of larger economies such as France, India, and Italy), and there are significant flows of manufactured goods, agricultural products, services, and technology between the two countries. Major American firms have long been major investors in South Korea, while South Korea’s leading firms have begun to make significant investments in the United States. The implementation of structural reforms contained in the International Monetary Fund’s 1998 program for South Korea improved access to the country’s market and improved trade relations between the United States and South Korea.

The United States and South Korea launched negotiations on the U.S.-Korea Free Trade Agreement (KORUS FTA) on February 2, 2006. The KORUS FTA was signed on June 30, 2007, and is currently awaiting ratification in the U.S. Congress and the Korean National Assembly. The KORUS FTA is a comprehensive FTA that eliminates virtually all barriers to trade and investment between the two countries. Tariffs on 95% of trade between the two countries will be eliminated within 3 years of implementation, with virtually all the remaining tariffs being removed within 10 years of implementation; the FTA also contains chapters that address non-tariff measures in investment, intellectual property, services, competition policy, and other areas. The KORUS FTA is the largest free trade agreement South Korea has ever signed, and it would be the largest free trade agreement for the United States since the North American Free Trade Agreement (NAFTA) in 1992.

Economy

The Republic of Korea’s economic growth over the past several decades has been spectacular. Per capita GNP, only $100 in 1963, is now $25,000. South Korea is now the 13th-largest economy in the world.

In the early 1960s, the government of Park Chung Hee instituted sweeping economic policy changes emphasizing exports and labor-intensive light industries, leading to rapid debt-financed industrial expansion. The government carried out a currency reform, strengthened financial institutions, and introduced flexible economic planning. In the 1970s Korea began directing fiscal and financial policies toward promoting heavy and chemical industries, consumer electronics, and automobiles. Manufacturing continued to grow rapidly in the 1980s and early 1990s.

In recent years, South Korea’s economy has moved away from the centrally planned, government-directed investment model toward a more market-oriented one. The nation bounced back from the 1997–98 Asian financial crises with some International Monetary Fund assistance, but based largely on extensive financial reforms that restored stability to markets. These economic reforms, pushed by President Kim Dae-jung, helped South Korea return to growth, with growth rates of 10% in 1999 and 9%in 2000. The slowing global economy and falling exports slowed growth to 3.3% in 2001, prompting consumer stimulus measures that led to 7.0% growth in 2002. Consumer over-shopping and rising household debt, along with external factors, slowed growth to near 3% again in 2003. Economic performance in 2004 improved to 4.6% due to an increase in exports, and remained at or above 4% in 2005, 2006, and 2007.

Economists are concerned that South Korea’s economic growth potential has fallen because of a rapidly aging population and structural problems that are becoming increasingly apparent. Foremost among these structural concerns are the rigidity of South Korea’s labor regulations, the need for more constructive relations between management and workers, the country’s underdeveloped financial markets, and a general lack of regulatory transparency. South Korean policy makers are increasingly worried about diversion of corporate investment to China and other lower wage countries, and by South Korea’s falling foreign direct investment.

Best Export Opportunities

U.S. exporters will find a very good market for agricultural products in South Korea since local agricultural output currently does not meet the demand of the processing industry. Other markets offering opportunities for importers are automotive parts and accessories, broadcasting equipment, and computer software, to name a few. For further information, please visit the Best Export Opportunities section of the Official Export Guide’s South Korea country profile.

Foreign Investment

Most senior policy makers of the South Korean government have a positive attitude toward foreign direct investment, making the country more attractive to outside investors. The country is still hampered by excessive regulations and a need for better protection of intellectual property rights. More detailed information on investing in South Korea is available in the Official Export Guide Country Profile of South Korea.

Transportation

Flying time for direct flights from the United States to South Korea ranges from 12 to 16 hours, depending on the point of departure. Flights with connections can take as long as 18 hours, door to door. Incheon International Airport is the primary gateway for international travel to and from South Korea. The airport is one of the most modern in East Asia. Incheon Airport is currently only accessible by car or bus, bit construction of the Incheon International Airport Railroad (A’REX) is nearly complete. Airport buses and taxis are widely available.

Seoul’s public transportation system is very well organized. With nine subway lines and city buses that serve the entire city, as well as a multitude of taxis, traffic is the only major obstacle to movement. The seemingly endless rush-hour traffic can be a major hindrance, so early preparation, as well as patience, is required. Fortunately, buses take less travel time than taxis because of a bus-only lane traffic system. The Seoul Metropolitan Government maintains an English language interactive bus map that allows passengers to obtain bus route and schedule information based on point of origin and destination.

Public transportation is recommended for travel in South Korea. KTX provides high-speed transportation to major cities throughout South Korea. There are also intercity urban railway networks connecting Seoul to the rest of the country.

Map of South Korea

Turkey at a glance

Capital: Ankara
Population: 71,892,808 (July 2008 est.)
Government Type: Republican Parliamentary Democracy

GDP: $853.9 billion
Imports: $162 billion f.o.b.
Exports: $115.3 billion f.o.b.

Modern Turkey encompasses  cosmopolitan centers, farming villages,  wastelands,  Aegean coastlines, and steep mountain regions. More than 70% of Turkey’s population lives in urban areas that juxtapose Western lifestyles with more traditional ways of life.

The Turkish state has been officially secular since 1924. Approximately 99% of the population is Muslim. Most Turkish Muslims follow the Sunni traditions of Islam, although a significant number follow Alevi and Shiite traditions. Questions regarding role of religion in society and government, the role of linguistic and ethnic identity, and the public’s expectation to live securely dominate public discourse. Turkish citizens who assert a Kurdish identity constitute an ethnic and linguistic group that is estimated at approximately 12 million in number.

The presidency’s powers are not precisely defined in practice, and the president’s influence depends on his personality and political weight. The president and the Council of Ministers led by the prime minister share executive powers. The current president, who has broad powers of appointment and supervision, was elected by Parliament in August 2007 for a seven-year term. Pursuant to a constitutional amendment package approved by voters in an October 2007 referendum, the president is directly elected by the voters for a term of 5 years and can serve for a maximum of two terms. The prime minister administers the government. The prime minister and the Council of Ministers are responsible to Parliament. The 550-member Parliament carries out legislative functions.

The judiciary is declared to be independent, but the need for judicial reform and confirmation of its independence are subjects of open debate. Internationally recognized human rights, including freedom of thought, expression, assembly, and travel, are officially in the Constitution but have at times been narrowly interpreted, can be limited in times of emergency, and cannot be used to violate what the Constitution and the courts consider the integrity of the state.

U.S. - Turkish Relations

U.S.-Turkish friendship dates to the late 18th century. As part of the cooperative effort to further Turkish economic and military self-reliance, the United States has loaned and granted Turkey more than $12.5 billion in economic aid and more than $14 billion in military assistance. U.S.-Turkish relations focus on areas such as strategic energy cooperation, trade and investment, security ties, regional stability, the global war on terrorism, and human rights progress. For several years, the United States and Turkey have had a Trade and Investment Framework Agreement and an Economic Partnership Commission.

EU Accession

Turkey’s principal ongoing economic challenge is providing for the needs of a fast-growing population. Raising living standards to those prevalent in Europe will require a high GDP growth rate and a well-functioning market economy. This will entail continued structural reforms that encourage both domestic and foreign investment.  As an aspirant to membership in the European Union, Turkey aims to adopt the EU’s basic system of national law and regulation (the acquis communautaire) by 2014. While implementing some elements of the acquis will be costly and difficult (for example in the areas of environmental protection and agriculture), its adoption will make a significant contribution to modernizing the economy.

Economy

Turkey is a large, middle-income country with relatively few natural resources. Its economy is currently in transition from one relying on agriculture and heavy industry to a more diversified one with an increasingly large and globalized services sector. Coming out of a tradition of a state-directed economy that was relatively closed to the outside world, Prime Minister and then President Turgut Ozal began to open up the economy in the 1980s, leading to the signing of a Customs Union with the European Union in 1995. In the 1990s, Turkey’s economy suffered from a series of coalition governments with weak economic policies, leading to high-inflation boom-and-bust cycles that culminated in a severe banking and economic crisis in 2001.

Turkey’s economy has recovered strongly from the 2001 recession thanks to good monetary and fiscal policies and structural economic reforms made with the support of the International Monetary Fund and the World Bank. The independence of the Central Bank has been firmly established, a floating exchange rate system has been put in place, and the government’s overall budget deficit has been substantially reduced. In addition, there have been reforms in the financial, energy, and telecommunications sectors that have included the privatization of several large state-owned institutions.

Turkey’s economy grew an average of 6.0% per year from 2002 through 2007 — one of the highest sustained rates of growth in the world. It is expected to grow about 5.5% in 2008. Inflation and interest rates have fallen significantly, the currency has stabilized, government debt has declined to more supportable levels, and business and consumer confidence have returned. At the same time, booming economic growth has contributed to a growing current account deficit. Though Turkey’s vulnerabilities have been greatly reduced, the economy could still face problems in the event there is a sudden change in investor sentiment. Continued implementation of reforms, including a tight fiscal policy and securing independent Central Bank monetary policies, is essential to sustain growth and stability.

Best Export Opportunities

U.S. exporters have excellent prospects in the Turkish energy market. Electricity and gas distribution, power generation and renewable energies (wind and hydro) will all be in demand. In addition, there may be opportunities in the nuclear sector, telecommunications equipment, security equipment, and the automotive aftermarket. More information on prospects in the Turkish market can be found in the Best Export Opportunities Section of the Turkey country profile.

Foreign Investment

After years of low levels of foreign direct investment, in January–November 2007, Turkey succeeded in attracting $16.6 billion in foreign direct investment; it is expected to attract a similar level in 2008. A series of large privatizations, the stability fostered by the start of Turkey’s EU accession negotiations, strong growth, and structural changes in the banking, retail, and telecommunications sectors have all contributed to the rise in foreign investment. Turkey has taken steps to improve its investment climate through administrative streamlining, an end to foreign investment screening, and strengthened intellectual property legislation. However, a number of disputes involving foreign investors in Turkey and certain policies, such as high taxation and continuing gaps in the intellectual property regime, inhibit investment. Turkey has a number of bilateral investment and tax treaties, including with the United States, which guarantee free repatriation of capital in convertible currencies and eliminate double taxation. Information on investment and intellectual property rights can be found in the Official Export Guide country profile of Turkey.

Transportation

The national flag carrier, Turkish Airlines (THY), together with its subsidiaries, dominates air passenger service and flies non-stop daily to most major European, Middle Eastern, and Asian cities and U.S. gateways, including Tokyo, London, Frankfurt, Paris, New York, and Chicago. Major European airlines also have frequent non-stop flights to Turkey. Delta Airlines serves Istanbul direct from its New York Kennedy hub. THY is joining the Star Alliance in 2008. United Airlines and Lufthansa offer code-share service with Lufthansa serving Istanbul, Izmir and Ankara from its Star Alliance Frankfurt and Munich hubs. Though Turkish Airlines dominates domestic air travel within Turkey, the government has liberalized domestic air service, and new airlines are also serving the domestic market. Rail transportation is also available between most of the major cities. Comprehensive networks of long distance buses, which are inexpensive, operate between the major cities. Car rental is relatively expensive. Public transportation is available in the cities, but businesspeople are advised to use taxis.

Map of Turkey

Chile at a glance

Capital: Santiago
Population: 16,454,143 (July 2008 est.)
Government Type: Republic

GDP: $231.1 billion
Imports: $43.99 billion f.o.b.
Exports: $67.64 billion f.o.b.

About 85% of Chile’s population lives in urban areas, with 40% living in greater Santiago. Most have Spanish ancestry. A small yet influential number of Irish and English immigrants came to Chile during the colonial period. German immigration began in 1848 and lasted for 90 years; the southern provinces of Valdivia, Llanquihue, and Osorno show a strong German influence. Other significant immigrant groups are the Italian, Croatian, Basque, and Palestinian. About 800,000 Native Americans, mostly of the Mapuche tribe, reside in the south-central area. The Aymara and Diaguita groups can be found mainly in Chile’s northern desert valleys.

Chile’s president serves a term of 4 years. President Michelle Bachelet and the new members of Congress took office in  2006. Chile has a bicameral Congress, which meets in the port city of Valparaiso, about 84 miles west of the capital. Deputies are elected every 4 years, and senators serve 8 year terms. The judiciary is independent and includes a court of appeal, a system of military courts, a constitutional tribunal, and a supreme court.

The northern Chilean desert contains great mineral wealth, principally copper. The relatively small central area dominates the country in terms of population and agricultural resources. This area also is the cultural and political center from which Chile expanded in the late 19th century, when it incorporated its northern and southern regions. Southern Chile is rich in forests and grazing lands and features a string of volcanoes and lakes. The Andes Mountains are located on the eastern border.

U.S. - Chile Relations

Relations between the United States and Chile are better now than at  any other time in history. The U.S. Government applauded the rebirth of democratic practices in Chile in the late 1980s and early 1990s and sees the maintenance of a vibrant democracy and a healthy and sustainable economy as among  the most important U.S. interests in Chile. Besides the landmark 2003 U.S.-Chile FTA, the two governments consult frequently on issues of mutual concern, including the areas of multilateral diplomacy, security, culture, and science.

Economy

Chile has pursued generally sound economic policies for nearly 30 years. The government’s role in the economy is mostly limited to regulation, although the state continues to operate copper giant CODELCO and a few other enterprises (there is one state-run bank). The country is strongly committed to free trade and has welcomed large amounts of foreign investment. Chile has signed free trade agreements (FTAs) with a whole network of countries. Over the last several years, Chile has signed FTAs with Brunei, China, the European Union, Japan, New Zealand, Singapore, and South Korea.

Unemployment in Chile dipped to 7.8% at the end of 2007, due largely to the fact that fewer Chileans were entering the workforce rather than to a substantial and sustained creation of new jobs. The decrease in unemployment can also be attributed to a limited increase in jobs caused by foreign direct investment. Most international observers place some of the blame for Chile’s consistently high unemployment rate on complicated and restrictive labor laws. Wages have risen faster than inflation as a result of higher productivity, boosting national living standards. Chile’s independent Central Bank pursues an inflation target of between 2% and 4%. In 2007, however, inflation inched towards 8%. The Chilean peso’s rapid appreciation against the U.S. dollar in recent years has helped dampen inflation. Most wage settlements and loans are indexed, reducing inflation’s volatility.

After a decade of impressive growth rates, Chile began to experience a moderate economic downturn in 1999. The economy remained sluggish until 2003, when it began to show clear signs of recovery, achieving 3.3% real GDP growth. The Chilean economy finished 2004 with growth of 6.1%. Real GDP growth reached 6.3% in 2005, decreased to 4.0% in 2006, and rose once again to 5.2% in 2007. Higher energy prices as well as lagging consumer demand were drags on the economy in 2006. Greater government spending and favorable external conditions (including record copper prices for much of 2006) were not enough to offset these drags.

Best Export Opportunities

The U.S.-Chile FTA and a more competitive U.S. dollar offer advantages for U.S. exporters. Among the agricultural products in demand are corn, wheat, pet food, soy, pork products, and snack foods. As Chile is in the Southern Hemisphere, off-season produce shipments are an option. The country’s market for computers has shown positive growth for the last 3 years, with opportunities in both hardware and software. From medical and mining equipment to pollution control and food processing equipment, the Chilean market has much to offer U.S. exporters. For more details on exporting prospects, check the Country Trade Sourcebook article on Chile.

Foreign Investment

Total foreign direct investment (FDI) was only $3.4 billion in 2006, up 52% from a poor performance in 2005. However, 80% of FDI continues to go to only four sectors: electricity, gas, water, and mining. Much of the jump in FDI in 2006 resulted from acquisitions and mergers, and it did little to create new employment in Chile. The Chilean government has formed a Council on Innovation and Competition, which is tasked with identifying new sectors and industries to promote. It is hoped that this effort, combined with some tax reforms to encourage domestic and foreign investment in research and development, will bring in additional FDI to new parts of the economy. As of 2006, Chile invested only 0.6% of its annual GDP in research and development (R&D). Even then, two-thirds of that was government spending. The fact that domestic and foreign companies spend almost nothing on R&D does not bode well for the government’s efforts to develop innovative, knowledge-based sectors. More information on conditions in Chile can be found in the investment section of the Chile country profile.

Transportation

Chile is well connected via air service to the United States and countries throughout Latin America. American Airlines has non-stop service between Santiago and both Miami and Dallas, and Delta Airlines has non-stop service to Atlanta. Chile’s main airline, LAN, partners with American Airlines in the OneWorld Alliance and offers non-stop service to Miami and direct service to Los Angeles via Lima, Peru. The primary point of entry is the Santiago International Airport. Domestic air service is well developed. Flights between Santiago and most cities in Chile are fairly frequent.

The train system is less developed, but there is a good central train line that runs between Santiago and Temuco. Primary roads in Chile are good. The main highways are concessioned toll roads and are in good condition. Secondary roads, especially outside of Santiago, are sometimesin lesser repair. Gravel and dirt roads are common in rural areas.

Map of Chile

Nigeria at a glance

Capital: Abuja
Population: 138,283,240
Government Type: Federal Republic

GDP: $292.7 billion (2007 estimate)
Imports: $38.83 billion f.o.b. (2007 estimate)
Exports: $62.42 billion f.o.b. (2007 estimate)

The most populous country in Africa, Nigeria accounts for over half of West Africa’s population. Although less than 25% of Nigerians are urban dwellers, at least 24 cities have populations of more than 100,000. The variety of customs, languages, and traditions among the 250 ethnic groups gives the country a rich diversity. The dominant ethnic group in the northern two-thirds of the country is the Hausa-Fulani, most of whom are Muslim. Other major ethnic groups of the north are the Nupe, Tiv, and Kanuri. The Yoruba people are predominant in the southwest. About half of the Yorubas are Christian and half Muslim. The predominantly Catholic Igbo are the largest ethnic group in the southeast, with the Efik, Ibibio, and Ijaw comprising a substantial segment of the population in that area. Persons of different language backgrounds most commonly communicate in English, although knowledge of two or more Nigerian languages is widespread. Hausa, Yoruba, Igbo, Fulani, and Kanuri are the most widely used Nigerian languages.

Nigeria had had 16 years of military rule when a new constitution was adopted in 1999, and a peaceful transition to civilian government was completed. The government continues to face the daunting task of reforming a petroleum-based economy, whose revenues have been squandered through corruption and mismanagement, and establishing democracy as an institution. In addition, Nigeria continues to experience longstanding ethnic and religious tensions. Although both the 2003 and 2007 presidential elections were marred by significant irregularities and violence, Nigeria is currently experiencing its longest period of civilian rule since independence.

U.S. - Nigerian Relations

With the nullification of Nigeria’s June 12, 1993, presidential election, and in light of human rights abuses, the United States imposed numerous sanctions on Nigeria. After a period of increasingly strained relations, the death of General Abacha in June 1998 and his replacement by General Abubakar opened a new phase of improved  relations. The bilateral relationship has continued to improve, and cooperation on many important foreign policy goals, such as regional peacekeeping, has been excellent. An estimated one million Nigerians and Nigerian Americans live, study, and work in the United States, while over 25,000 Americans live and work in Nigeria.

The United States is helping Nigeria make efforts to develop inclusive, transparent, and effective institutions of democratic governance. U.S. assistance aims to help make elected officials accountable to constituents through free and fair elections, and also support democratic local government and decentralization and improve fiscal administration by maximizing revenue collection in credible audits. The U.S. Agency for International Development (USAID) has a program in Nigeria that supports economic growth and agricultural development by encouraging policy improvements and by providing technical assistance, training, and technologies to farmers and entrepreneurs.

Economy

Nigeria is the United States’ largest trading partner in sub-Saharan Africa, largely due to the high level of petroleum imports from Nigeria. Nigeria provides 11% of U.S. oil imports — nearly 46% of its daily oil production. Nigeria is the fifth-largest exporter of oil to the United States. Total two-way trade was valued at $35 billion in 2007, a 17% increase over 2006. Led by machinery, wheat, and motor vehicles, U.S. goods exports to Nigeria in 2007 were up 25% from 2006, and U.S. imports were up 17%. U.S. imports were predominantly oil. However, rubber products, cocoa, gum arabic, cashews, coffee, and ginger constituted over $70 million of U.S. imports from Nigeria in 2007. Nigeria is currently the 50th-largest export market for U.S. goods and the 14th-largest exporter of goods to the United States.

In April 2008, the United States and Nigeria met under the existing Trade and Investment Framework Agreement (TIFA) to advance the ongoing work program and to discuss improvements in Nigerian trade policies and market access. Among the topics discussed were cooperation in the World Trade Organization (WTO), market access, export diversification, commercial issues, trade capacity building and technical assistance, infrastructure, and investment issues.

Nigeria made progress toward establishing a market-based economy in 2006. It privatized Nigeria Telecommunications and its mobile subsidiary as well as the only government-owned petrochemical company. The government also sold its interest in eight oil service companies. Nigeria continued implementation of the Economic Community of West African States (ECOWAS) Common External Tariff. Nigeria’s implementation of non-tariff barriers has been arbitrary and uneven and continues to violate WTO prohibitions against trade bans. However, the government removed some textile items from its list of prohibited imports in 2006. Enforcement of criminal penalties against intellectual property rights (IPR) violations is weak, and firms that are successfully countering IPR piracy have generally done so through civil court cases. The government has recently created an intellectual property commission.

Nigeria is still experiencing major problems with corruption. A recent article (available online; subscription required) in the Journal of Commerce (also published by Commonwealth Business Media), on a U.S. Justice Department probe of a logistics group’s dealings in Nigeria, notes the prevalence of corruption and bribery in the country’s business practices.

More information on Nigerian intellectual property rights and the transparency of the regulatory system can be found in the Trade Data section of the Nigeria Country Profile.

Agriculture

Agriculture has suffered from years of mismanagement, inconsistent and poorly conceived government policies, and the lack of basic infrastructure. Still, the sector accounts for over 41% of GDP and two-thirds of employment. Agriculture provides a big chunk of non-oil growth, which in 2006 reached 9%. Nigeria is no longer a major exporter of cocoa, groundnuts (peanuts), rubber, or palm oil. Cocoa production, mostly from obsolete varieties and overage trees, is stagnant at around 180,000 tons annually; 25 years ago it was 300,000 tons. An even more dramatic decline in groundnut and palm oil production also has taken place. Although Nigeria was once the biggest poultry producer in Africa, corporate poultry output has been slashed from 40 million birds annually to about 18 million. Import constraints limit the availability of many agricultural and food processing inputs for poultry and other sectors. Fisheries are poorly managed. Most critical for the country’s future, Nigeria’s land tenure system does not encourage long-term investment in technology or modern production methods and does not inspire the availability of rural credit.

Oil

The oil boom of the 1970s led Nigeria to neglect its strong agricultural and light manufacturing bases in favor of an unhealthy dependence on crude oil. New oil wealth, the concurrent decline of other economic sectors, and a lurch toward a statist economic model fueled massive migration to the cities and led to increasingly widespread poverty, especially in rural areas. A collapse of basic infrastructure and social services since the early 1980s accompanied this trend. By 2002 Nigeria’s per capita income had plunged to about one-quarter of its mid-1970s high, below the level at independence. Along with the endemic malaise of Nigeria’s non-oil sectors, the economy continues to witness massive growth of “informal sector” economic activities, estimated by some to be as high as 75% of the total economy.

Nigeria’s proven oil reserves are estimated to be 36 billion barrels; natural gas reserves are well over 100 trillion cubic feet. Nigeria is a member of the Organization of Petroleum Exporting Countries (OPEC), and in 2006 its crude oil production averaged around two million barrels per day. Poor corporate relations with indigenous communities, vandalism of oil infrastructure, severe ecological damage, and personal security problems throughout the Niger Delta oil-producing region continue to plague Nigeria’s oil sector. Efforts are underway to reverse these troubles. In the absence of coherent government programs, the major multinational oil companies have launched their own community development programs. The Niger Delta Development Commission (NDDC) was created to help catalyze economic and social development in the region, but it is widely perceived to be ineffective and opaque. Oil accounts for 90% of Nigeria’s exports and over 80% of government revenue.

Oil field equipment will offer opportunities to U.S. suppliers. More information on this and other likely export market sectors can be found in the Best Export Opportunities section of the Nigerian Country Profile.

Foreign Investment

Although Nigeria must grapple with its decaying infrastructure and a poor regulatory environment, the country possesses many positive attributes for carefully targeted investment and will likely expand as both a regional and international market player. Profitable niche markets outside the energy sector, such as specialized telecommunication providers, have developed under the government’s reform program. There is a growing consensus that foreign investment is essential to realizing Nigeria’s vast potential. Companies interested in long-term investment and joint ventures, especially those that use locally available raw materials, will find opportunities in the large national market. However, to improve prospects for success, potential investors must educate themselves extensively on local conditions and business practices, establish a local presence, and choose their partners carefully.

Transportation

Congested airport facilities in Lagos often lead to long delays, and airline reservations may not be honored due to overbooking, especially on domestic flights. Domestic airline schedules are reasonably reliable, but lack of aviation fuel can cause delays or result in cancellation of flights. Travelers on international flights should arrive at the airport at least 2 hours before scheduled departure. Air accidents in recent years have increased concern  about maintenance standards on domestic airlines.

Taxi service is available in Lagos and most other urban areas, but cabs are not recommended, as they are generally old, often unreliable, and can be unsafe. If taxis are used, fares should be negotiated in advance, particularly to and from airports. Cars with drivers are also available for hire through hotels and car rental agents, and use of those services is a highly recommended alternative to taxis.

Map of Nigeria

Bangladesh at a glance

Capital: Dhaka
Population: 153,546,901 (July 2008 estimate)
Government Type: Parliamentary democracy

GDP: $206.7 billion
Imports: $16.03 billion f.o.b.
Exports: $11.75 billion f.o.b.

Bangladesh is a low-lying country located in South Asia with a largely marshy jungle coastline on the Bay of Bengal. Natural calamities, such as floods, tropical cyclones, tornadoes, and tidal bores, affect the country almost every year. Moreover, major cyclones hit Bangladesh on average 16 times a decade. Urbanization is proceeding rapidly, and it is estimated that only 30% of the population entering the labor force in the future will be absorbed into agriculture, although many will likely find other kinds of work in rural areas. The areas around Dhaka and Comilla are the most densely settled. The Sundarbans, an area of coastal tropical jungle in the southwest, and the Chittagong Hill Tracts on the southeastern border with Burma and India are the least densely populated.

Bangladesh has a rich historical and cultural past, combining Dravidian, Indo-Aryan, Mongol/Mughul, Arab, Persian, Turkic, and western European cultures. Residents of Bangladesh, about 98% of whom are ethnic Bengali and speak Bangla, are called Bangladeshis. Urdu-speaking, non-Bengali Muslims of Indian origin, and various tribal groups, mostly in the Chittagong Hill Tracts, comprise the remainder of the population. Most Bangladeshis (about 88.3%) are Muslims, but Hindus constitute a sizable (10.5%) minority. There also are a small number of Buddhists, Christians, and animists. English is spoken in urban areas and among the educated.

The president, while chief of state, holds a largely ceremonial post; the real power is held by the prime minister, who is head of government. The president is elected by the legislature (Parliament) every 5 years. The prime minister is appointed by the president. The prime minister must be a Member of Parliament (MP). The legislature is a unicameral, 300-seat body. All of its members are elected by universal suffrage at least every 5 years. Bangladesh’s judiciary is a civil court system based on the British model; the highest court of appeal is the appellate court of the Supreme Court.

Bangladesh - U.S. Relations

U.S.-Bangladesh relations are excellent. A centerpiece of the bilateral relationship is a large U.S. aid program, which will total about $110 million in fiscal year 2008. U.S. economic and food aid programs concentrate on long-term development. U.S. assistance objectives include stabilizing population growth, protecting human health, encouraging broad-based economic growth, and building democracy. In total, the United States has provided more than $4.3 billion in food and development assistance to Bangladesh. Other U.S. development assistance emphasizes family planning and health, agricultural development, and rural employment. The U.S. trade balance with Bangladesh has been negative, due largely to growing imports of ready-made garments. Jute carpet backing is the other major U.S. import from Bangladesh. U.S. exports to Bangladesh include wheat, fertilizer, cotton, communications equipment, aircraft, and medical supplies, a portion of which is financed by the U.S. Agency for International Development (USAID). A bilateral investment treaty was signed in 1989.

Economy

Although one of the world’s poorest and most densely populated countries, Bangladesh has made major strides to meet the food needs of its growing population, through increased domestic production augmented by imports. The land is devoted mainly to rice and jute cultivation, although wheat production has increased in recent years; the country is largely self-sufficient in rice production. Nonetheless, an estimated 10% to 15% of the population faces serious nutritional risk. Bangladesh’s predominantly agricultural economy depends heavily on an erratic monsoonal cycle, with periodic flooding and drought. Infrastructure to support transportation, communications, and power supply is poorly developed, but it is improving. Bangladesh is limited in its reserves of coal and oil, and its industrial base is weak. The country’s main endowments include its vast human resource base, rich agricultural land, relatively abundant water, and substantial reserves of natural gas.

Since independence in 1971, Bangladesh has received more than $30 billion in grant aid and loan commitments from foreign donors, about $15 billion of which has been disbursed. Major donors include the World Bank, the Asian Development Bank, the UN Development Program, the United States, Japan, Saudi Arabia, and west European countries. Bangladesh historically has run a large trade deficit, financed largely through aid receipts and remittances from workers overseas. Foreign reserves dropped markedly in 2001 but stabilized in the $3 to $4 billion range (or about 3 months’ import cover). In January 2007, reserves stood at $3.74 billion, and they increased to $5.39 billion by January 2008, according to the Bank of Bangladesh, the central bank.

Prospects for U.S. suppliers can be found in the Best Export Opportunities section of the Bangladesh country profile.

Industry
Fortunately for Bangladesh, many new jobs — 1.8 million, mostly for women — have been created by the country’s dynamic private ready-made garment industry, which grew at double-digit rates through most of the 1990s. The labor-intensive process of ship-breaking for scrap has developed to the point where it now meets most of Bangladesh’s domestic steel needs. Other industries include sugar, tea, leather goods, newsprint, pharmaceutical, and fertilizer production. The country has done less well, however, in expanding its export base — garments account for more than three-fourths of all exports, dwarfing the country’s historic cash crop, jute, along with leather, shrimp, pharmaceuticals, and ceramics.

Despite the country’s politically motivated general strikes, poor infrastructure, and weak financial system, Bangladeshi entrepreneurs have shown themselves adept at competing in the global garments marketplace. Bangladesh exports significant amounts of garments and knitwear to the United States and the European Union (EU). Moreover, the initial impact of the end of quotas on Bangladesh’s ready-made garment industry has been positive. Downward price pressures, however, mean Bangladesh must continue to cut final delivered costs if it is to remain competitive in the world market.

For details on intellectual property rights and on the transparency of the regulatory system, please visit the Trade Data section of the Bangladesh country profile.

Agriculture

Most Bangladeshis earn their living from agriculture. Although rice and jute are the primary crops, maize and vegetables are assuming greater importance. The expansion of irrigation networks has led some wheat producers to switch to cultivation of maize, which is used mostly as poultry feed. Tea is grown in the northeast. Because of Bangladesh’s fertile soil and normally ample water supply, rice can be grown and harvested three times a year in many areas.

A number of factors have contributed to steady increases in food grain production despite the often unfavorable weather conditions. These include better flood control and irrigation, a generally more efficient use of fertilizers, and the establishment of better distribution and rural credit networks.

Foreign Investment

The Bangladesh Government continues to court foreign investment, something it did fairly well in the 1990s in private power generation and gas exploration and production, as well as in sectors such as cellular telephony, textiles, and pharmaceuticals. In 1989, the same year it signed a bilateral investment treaty with the United States, it established a board of investment to simplify approval and start-up procedures for foreign investors, although in practice the board has done little to increase investment. Bangladesh also has established export processing zones in Chittagong (1983), Dhaka (1994), Comilla (2000), Mongla (2001), Iswardi (2005), Uttara (2006), and Karnafully (2007).

The most important reforms Bangladesh should make to be able to compete in a global economy are to privatize state-owned enterprises (SOEs), deregulate and promote foreign investment in high-potential industries like energy and telecommunications, and take decisive steps toward combating corruption and strengthening the rule of law.

Transportation

Zia International Airport is located at Kurmitola, about 12 kilometers north of the city of Dhaka. The national air carrier, Biman Airlines, is the major domestic air travel provider. Private GMG Airlines has flights from Dhaka to Chittagong, Cox’s Bazaar, Jessore, and Sylhet. Lately GMG has been accorded permission to fly international routes. GMG now flies round-trip from Dhaka to Calcutta, New Delhi, Bangkok and Kathmandu and from Chittagong to Bangkok and Calcutta.

The Bangladeshi road network is in poor condition and poorly maintained. The streets of Dhaka are extremely congested; bicycle rickshaws compete with three-wheeled mini-taxis (CNGs), cars, overloaded buses, and trucks on limited road space. Travelers are strongly urged not to use public transportation, including buses, rickshaws, and three-wheeled baby taxis, due to their high accident rate and crime issues. An alternative to consider is a rental car and hired driver.

Map of Bangladesh

Poland at a glance

Capital: Warsaw
Population: 38,500,696
Government Type: Republic

GDP: $620.9 billion
Imports: $160.2 billion f.o.b.
Exports: $144.6 billion f.o.b.

Poland constitutes a market of 38 million people located in the heart of central Europe, sharing borders with EU countries and markets to the east, including Ukraine, Belarus, and Russia (Kaliningrad oblast). It has become a fully integrated member of the European Union since its May 2004 accession, adhering to common economic, structural, and commercial policies, including adoption of the common external tariff regime. Its accession to the Schengen free transit zone in December 2007 eliminated all remaining border checks along its intra-EU frontiers. Poland is also an active member of NATO, upgrading its armed forces accordingly and participating in joint peacekeeping activities in the region and beyond.

The current governmental structure consists of a council of ministers led by a prime minister, typically chosen from the majority coalition in the bicameral legislature’s lower house (Sejm). The president, elected every 5 years for no more than two terms, is the head of state and commander-in-chief of the armed forces. The judicial branch plays a minor role in decision-making.

Polish - U.S. Relations

The United States established diplomatic relations with the newly formed Polish Republic in April 1919, but were cool during Poland’s time as part of the Warsaw Pact. A consular agreement was signed in 1972. The birth of Solidarity in 1980 raised the hope that progress would be made in Poland’s external relations as well as in its domestic development. During this time, the United States provided $765 million in agricultural assistance. Human rights and individual freedom issues, however, were not improved upon, and the U.S. revoked Poland’s most-favored-nation (MFN) status in response to the Polish Government’s decision to ban Solidarity. MFN status was reinstated in 1987, and diplomatic relations were upgraded.

The United States and Poland have enjoyed warm bilateral relations since 1989. Every post-1989 Polish government has been a strong supporter of continued American military and economic presence in Europe. As well as supporting the Global War on Terror, Operation Enduring Freedom in Afghanistan, and coalition efforts in Iraq, Poland cooperates closely with American diplomacy on such issues as democratization, nuclear proliferation, human rights, regional cooperation in central and eastern Europe, and UN reform.

Economy

The Polish economy grew rapidly in the mid-1990s, slowed considerably in 2001 and 2002, and returned again to healthy growth rates in 2003. Poland’s gross domestic product (GDP) grew at an annualized rate of 6.1% in the first quarter of 2008. Faster growth has begun to reduce persistently high unemployment, from nearly 20% in the middle of 2004 to 10.6% in April 2008. Tight monetary policy and dramatic productivity growth have helped to hold down inflation, which was 2.5% on average in 2007. The prospects for inflation in 2008 due to growing fuel and food prices are less optimistic. Poland’s current account deficit increased from 1.4% of GDP in 2005 to 3.7% in 2007. The budget deficit was only 1.5% of GDP in 2007, compared with 4.9% in 2002, and is likely to stay around a 2% level in 2008.

Throughout the 1990s, the United States and other Western countries supported the growth of a free enterprise economy by reducing Poland’s foreign debt burden, providing economic aid, and lowering trade barriers. Poland graduated from U.S. Agency for International Development (USAID) assistance in 2000 and paid the balance of its U.S.-held Paris Club debt in 2005. Poland officially joined the European Union (EU) on May 1, 2004.

For details on intellectual property rights and on the transparency of the regulatory system, please visit the Trade Data section in the Poland country profile.

Foreign Trade

With the collapse of the ruble-based COMECON trading bloc in 1990, Poland scrambled to reorient its trade. As early as 1996, 70% of its trade was with EU-15 members, and neighboring Germany today is Poland’s dominant trading partner. Most of Poland’s imports are capital goods needed for industrial retooling and for manufacturing inputs, rather than imports for consumption. Poland, a member of the World Trade Organization (WTO) and European Union, applies the EU’s common external tariff to goods from other countries, including the United States.

In the year after it joined the EU, Poland experienced an overall growth in exports of 30%. This growth was not confined to trade among EU partners: while exports to EU countries rose by 27%, exports to developing countries rose by 46%, and exports to Russia rose an unexpected 77%. Poland’s trade balance continued to improve, with export growth significantly outpacing import growth. Opportunities for trade and investment continue to exist across virtually all sectors.

The American Chamber of Commerce in Poland has more than 300 members. Strong economic growth potential, a large domestic market, EU membership, and political stability are the top reasons U.S. and other foreign companies do business in Poland.

Prospects for U.S. suppliers can be found in the Best Export Opportunities section of the Poland country profile.

Foreign Investment

As a result of Poland’s growth and investment-friendly climate, the country has received over $85 billion in foreign direct investment (FDI) since 1990. The availability of cheap land and a large, relatively skilled labor force are among Polish strengths. However, the government continues to play a strong role in the economy, as seen in excessive red tape and the high level of politicization in many business decisions. Investors complain that state regulation is not transparent or predictable, and the economy suffers from a lack of competition in many sectors, notably telecommunications.

Transportation

Transportation by air to and from Poland is excellent. International carriers fly to Poland many times per day from all over the world, and LOT Polish Airlines has direct flights to Warsaw from Chicago, New York, and Newark. Delta, American, Northwest, and United have code-share relationships with various European carriers that serve Poland through their European hubs. No U.S. airline serves Poland directly at this time. In December 2007, Poland joined the Schengen area, which allows EU citizens to travel freely from Estonia to Portugal without border controls (except the UK, Ireland, Switzerland, Bulgaria, Romania, Cyprus, and Liechtenstein).

Transportation within Poland is quite convenient, especially by air and by train. Flights operate between major cities. Railway routes are extensive and reliable, with the “Inter-City” line providing first-class, express service to several cities. Rental cars are abundant, but due to significantly increased traffic over the past few years and a highway system that has not kept up, driving between Polish cities, especially at night, can be quite dangerous. Poland’s highway network, which is generally underdeveloped, is undergoing a major improvement to meet EU standards. Express toll highways connect Krakow and Katowice.

Map of Poland

Peru at a glance

Capital: Lima
Population: 29,180,899 (July 2008 est.)
Government Type: Constitutional Republic

GDP: $217.5 billion (2007 estimate)
Imports: $18.75 billion f.o.b. (2007 estimate)
Exports: $27.14 billion f.o.b. (2007 estimate)

Peru is the fifth most populous country in Latin America (after Brazil, Mexico, Colombia, and Argentina). Twenty-one cities have a population of 100,000 or more. Rural migration has increased the urban population from 35.4% of the total population in 1940 to an estimated 74.6% as of 2005.

Most Peruvians are either Spanish-speaking mestizos — a term that usually refers to a mixture of indigenous and European/Caucasian — or Amerindians, largely Quechua-speaking indigenous people. Peruvians of European descent make up about 15% of the population. There also are small numbers of persons of African, Japanese, and Chinese ancestry. With economic development, access to education, intermarriage, and large-scale migration from rural to urban areas, a more homogeneous national culture is developing, mainly along the relatively more prosperous coast. Peru’s distinct geographical regions are mirrored in a socioeconomic divide between the coast’s mestizo-Hispanic culture and the more diverse, traditional Andean cultures of the mountains and highlands.

The president is popularly elected for a 5-year term with no reelection. The first and second vice presidents also are popularly elected but have no constitutional functions unless the president is unable to discharge his duties. The principal executive body is the Council of Ministers, comprised of 15 members and headed by a prime minister. The president appoints its members, who must be ratified by the Congress. All executive laws sent to Congress must be approved by the Council of Ministers. The legislative branch consists of a unicameral Congress of 120 members. In addition to passing laws, Congress ratifies treaties, authorizes government loans, and approves the government budget. The judicial branch of government is headed by a 16-member Supreme Court. The Constitutional Tribunal interprets the constitution on matters of individual rights.

Peru - U.S. Relations

The United States enjoys strong and cooperative relations with Peru. Relations were strained following the tainted re-election of former President Fujimori in June 2000, but improved with the installation of an interim government in November 2000 and the inauguration of the government of Alejandro Toledo in July 2001. Relations with current President Alan Garcia’s administration are positive. The United States continues to promote the strengthening of democratic institutions and human rights safeguards in Peru and the integration of Peru into the world economy.

The United States and Peru cooperate on efforts to interdict the flow of narcotics, particularly cocaine, to the United States. Bilateral programs are now in effect to reduce the flow of drugs through Peru’s port systems and to perform ground interdiction in tandem with successful law enforcement operations. These U.S. Government-supported law enforcement efforts are complemented by an aggressive effort to establish an alternative development program for coca farmers in key coca growing areas to voluntarily reduce and eliminate coca cultivation.

U.S. investment and tourism in Peru have grown substantially in recent years. The United States is Peru’s number one trade partner, and economic and commercial ties will deepen with the implementation of the U.S.-Peru Trade Promotion Agreement (PTPA). About 200,000 U.S. citizens visit Peru annually for business, tourism, and study. About 16,000 Americans reside in Peru, and more than 400 U.S. companies are represented in the country.

Economy

Peru’s economy has shown strong growth over the past 5 years, helped by market-oriented economic reforms and privatization in the 1990s, and measures taken since 2001 to promote trade and attract investment. President Garcia and his economic team have continued these policies. GDP grew 8.0% in 2006 and is projected to have grown by more than 7% in 2007. Recent economic expansion has been driven by construction, mining, export growth, investment, and domestic demand. Inflation is projected to have remained under 2% in 2007, and the fiscal deficit is only 0.6% of GDP. In 2006 external debt decreased to $28.3 billion, and foreign reserves were a record $17.3 billion at the end of 2006. Peru’s economy is well managed, and better tax collection and growth are increasing revenues, with expenditures keeping pace. Private investment is rising and becoming more broad-based. The government has had success with recent international bond issuances, resulting in rating upgrades. The Garcia administration is studying decentralization initiatives and is focused on bringing more small businesses into the formal economy.

Foreign Trade

Peru and the United States signed the U.S.-Peru Trade Promotion Agreement (PTPA) in April 2006 in Washington, D.C. The PTPA was ratified by the Peruvian Congress in June 2006 and by the U.S. Congress in December 2007. On December 14, 2007, President Bush signed legislation to implement the PTPA. On February 29, 2008, the President signed legislation to extend the Andean Trade Preference Act (ATPA) until December 31, 2008.

Peru registered a trade surplus of $8.8 billion in 2006. Exports reached $23.7 billion, partially as a result of high mineral prices. Peru’s major trading partners are the United States, China, the European Union, Chile, and Japan. In 2006, 23% of exports went to the United States ($5.9 billion), and 16% of imports came from there ($2.9 billion). Exports include gold, copper, fishmeal, petroleum, zinc, textiles, apparel, asparagus and coffee. Imports include machinery, vehicles, processed food, petroleum and steel. Peru belongs to the Andean Community, the Asia-Pacific Economic Cooperation (APEC) forum, and the World Trade Organization (WTO).

Foreign Investment

The Peruvian Government actively seeks to attract both foreign and domestic investment in all sectors of the economy. The registered stock of foreign direct investment (FDI) is over $15.4 billion, with the United States, Spain, and the United Kingdom the leading investors. FDI is concentrated in telecommunications, mining, manufacturing, finance, and electricity.

Transportation

There are 19 international passenger airlines and six airline companies serving routes within Peru. There are direct flights between the United States and Peru, including American Airlines, Delta Airlines, and Continental Airlines. All international flights arrive at Jorge Chavez International Airport in Lima. Most of the airline companies also provide cargo transportation services. Domestic flights between Lima and larger cities in Peru are provided by Lan Peru, Taca, L.C. Busre, Aerocondor, ATSA, and Star Peru.

The railway system in Peru is not well-developed and is quite limited. Passenger services are provided by PeruRail, which has routes between either Cusco or the Sacred Valley and Machu Picchu in Aguas Calientes and between Cusco and Lake Titicaca in Puno. Ferrocarril Central Andino (FCCA) provides seasonal weekend tourist train services from Lima to Huancayo.

Public ground transportation is not recommended due to a high incidence of traffic accidents in Peru, frequently involving mini-buses and buses. Transportation to and from the airport by radio taxi or taxi service is approximately US$20. Taxis are abundant and not metered, so fares must be negotiated before getting into the cab. Taxis are plentiful and provide an inexpensive way to get around Lima; however, it is recommended to arrange these services with the hotels or call a radio taxi company. Given traffic conditions and security concerns, it is advisable that business travelers contract with an hourly taxi service or hire cars with drivers instead of renting a vehicle. Tips are not expected on short rides. If you lease a car with a driver, a tip is common.

Map of Peru

Egypt at a glance

Capital: Cairo
Population: 81,713,517 (July 2008 estimate)
Government Type: Republic

GDP: $431.9 billion (2007 estimate)
Imports: $40.48 billion f.o.b. (2007 estimate)
Exports: $27.42 billion f.o.b. (2007 estimate)

Egypt is the most populous country in the Arab world and the second most populous on the African continent. Nearly all of the country’s 79 million people live in Cairo and Alexandria, elsewhere on the banks of the Nile, in the Nile delta (which fans out north of Cairo), or along the Suez Canal. These regions are among the world’s most densely populated, containing an average of over 3,820 persons per square mile, as compared to 181 persons per square mile for the country as a whole.

The Egyptian Constitution provides for strong executive power. Authority is vested in an elected president who can appoint one or more vice presidents, a prime minister, and a cabinet. Egypt’s legislative body, the People’s Assembly, has 454 members — 444 popularly elected and 10 appointed by the president. The constitution reserves 50% of the assembly seats for “workers and peasants.” Below the national level, authority is exercised by and through governors and mayors appointed by the central government and by popularly elected local councils.

Egypt’s judicial system is based on European (primarily French) legal concepts and methods. Under the Mubarak government, the courts have demonstrated increasing independence, and the principles of due process and judicial review have gained greater respect. The legal code is derived largely from the Napoleonic Code.

Egypt - U.S. Relations

The United States and Egypt enjoy a strong and friendly relationship based on shared mutual interest in peace and stability in the Middle East, revitalizing the Egyptian economy, strengthening trade relations, and promoting regional security. Over the years, Egypt and the United States have worked together to expand peace negotiations by hosting talks, negotiations, and the Middle East and North Africa (MENA) Economic Conference. Multinational exercises, U.S. assistance to Egypt’s military modernization program, and Egypt’s role as a contributor to various UN peacekeeping operations reinforce the U.S.-Egyptian military relationship. An important pillar of the bilateral relationship remains U.S. security and economic assistance to Egypt, which expanded significantly in the wake of the Egyptian-Israeli Peace Treaty in 1979. The U.S. Agency for International Development (USAID) provided over $25 billion in economic and development assistance to Egypt between 1975 and 2002. There has been a shift in assistance from infrastructure, health, food supply, and agriculture toward market-based economic development, good governance, and training programs. The Commodity Import Program, through which USAID provides hundreds of millions of dollars in financing to enable the Egyptian private sector to import U.S. goods, remains one of the largest and most popular USAID programs. Since 2003, U.S. assistance has also focused more on economic reform, education, civil society, and other programs supported by the Middle East Partnership Initiative (MEPI).

Best Export Opportunities

The United States is Egypt’s largest bilateral trading partner, and U.S. exporters will find many opportunities in several areas, including agricultural machinery, telecommunications equipment, and automotive parts. The United States is also the second largest investor in Egypt, with roughly two-thirds of total U.S. investment in the oil and gas sectors. U.S. non-military economic assistance to Egypt in FY 2006 was more than $490 million. For further information on promising exports to the Egypt, visit the Country Trade Sourcebook’s Best Export Opportunities section for Egypt.

Economy

With the installation of the 2004 Egyptian parliament, the Government of Egypt began a new reform movement, following a stalled economic reform program begun in 1991, but moribund since the mid-1990s. In the past year, the cabinet economic team has simplified and reduced tariffs and taxes, improved the transparency of the national budget, revived stalled privatizations of public enterprises, and implemented economic legislation designed to foster private sector-driven economic growth and improve Egypt’s competitiveness. Despite these achievements, the economy is still hampered by government intervention, substantial subsidies for food, housing, and energy, and bloated public sector payrolls. Moreover, the public sector still controls most heavy industry.

Agriculture is mainly in private hands and has been largely deregulated, with the exception of cotton and sugar production. Construction, non-financial services, and domestic marketing are also largely private. The Egyptian economy, however, relies heavily on tourism, oil and gas exports, and Suez Canal revenues, much of which is controlled by the public sector and is also vulnerable to outside factors. The tourism sector suffered tremendously following a terrorist attack in Luxor in October 1997. The sector feared a repeat of the downturn in tourist numbers when terrorists attacked resorts in the Sinai Peninsula in 2004 and 2005. So far, however, the sector has not suffered as greatly as expected.

The United States has a large assistance program in Egypt and provides funding for a variety of programs in addition to some cash transfers. A portion of U.S. assistance to Egypt under the 2003 Iraq war supplemental appropriations was provided in the form of bond guarantees, which were contingent upon Egyptian compliance with a series of economic conditions. Egypt met the conditions and in September 2005 issued $1.25 billion in 10-year bonds that were fully guaranteed by the United States. To support the Middle East peace process through regional economic integration, the United States permits products to be imported from Egypt without tariffs if they have been produced in Qualified Industrial Zones and 11.7% of the inputs of these products originate from Israel.

Agriculture

Approximately one third of Egyptian labor is engaged directly in farming, and many others work in the processing or trading of agricultural products. Nearly all of Egypt’s agricultural production takes place in some 2.5 million hectares (6 million acres) of fertile soil in the Nile Valley and Delta. Some desert lands are being developed for agriculture, including as part of the ambitious Toshka project in Upper Egypt, but some other fertile lands in the Nile Valley and Delta are being lost to urbanization and erosion. Warm weather and plentiful water permit several crops a year. Further improvement is possible, but land is worked intensively, and yields are high. Cotton, rice, wheat, corn, sugar cane, sugar beets, onions, and beans are the principal crops. Increasingly, a few modern operations are producing fruits, vegetables, and flowers, in addition to cotton, for export. Although the desert hosts some large, modern farms, more common traditional farms occupy an acre each, typically in a canal-irrigated area along the banks of the Nile. Many small farmers also have cows, water buffaloes, and chickens.

The United States is a major supplier of wheat, corn, and soybean products to Egypt, almost all through commercial sales. Egypt is, in fact, traditionally the United States’ largest market for wheat. U.S. agricultural sales to Egypt average $1 billion annually. U.S. food assistance programs to Egypt ended in 1992 as Egypt became more prosperous. The country continues to receive modest food assistance through the World Food Program and from France.

Transportation & Communication

Transportation facilities in Egypt are centered in Cairo and largely follow the pattern of settlement along the Nile. The main line of the nation’s 2,800-mile (4,800-kilometer) railway network runs from Alexandria to Aswan. The well-maintained road network has expanded rapidly to over 21,000 miles, covering the Nile Valley and Delta, Mediterranean and Red Sea coasts, the Sinai, and the Western oases. Egypt Air provides reliable domestic air service to major tourist destinations from its Cairo hub, in addition to overseas routes. The Nile River system (about 1,600 km or 1,000 mi.) and the principal canals (1,600 km) are important locally for transportation. The Suez Canal is a major waterway of international commerce and navigation, linking the Mediterranean and Red Seas. Major ports are Alexandria and Port Said on the Mediterranean Sea, as well as Suez on the Red Sea.

Egypt has long been the cultural and informational center of the Arab world, and Cairo is the region’s largest publishing and broadcasting center. There are eight daily newspapers, with a total circulation of more than 2 million, and a number of monthly newspapers, magazines, and journals. Most political parties have their own newspapers, and these papers conduct a lively, often highly partisan, debate on public issues. Egyptian ground-broadcast television (ETV) is government controlled and depends heavily on commercial revenue. ETV has two main channels, six regional channels, and three satellite channels. Of the two main channels, Channel I uses mainly Arabic, while Channel II is dedicated to foreigners, broadcasting news in English and French as well as Arabic. Egyptian satellite channels broadcast to the Middle East, Europe, and the U.S. East Coast.

In April 1998, Egypt launched its own satellite, known as NileSat 101. Seven specialized channels cover news, culture, sports, education, entertainment, health, and drama. A second, digital satellite, Nilesat 102, was launched in August 2000. Many of its channels are rented to other stations. Three new private satellite-based TV stations were launched in November 2001, marking a great change in Egyptian government policy. Dream TV 1 and 2 produce cultural programming and broadcast contemporary video clips and films featuring Arab and international actors, as well as soap operas; another private station focuses on business and general news.

Radio in Egypt is almost all government controlled, using 44 short-wave frequencies, 18 medium-wave stations, and four FM stations. There are seven regional radio stations covering the country. Egyptian Radio transmits 60 hours daily overseas in 33 languages and 300 hours daily within Egypt. In 2000, Radio Cairo introduced new specialized (thematic) channels on its FM station. So far, they include news, music, and sports. Radio enjoys more freedom than TV in its news programs, talk shows and analysis.

Map of Egypt

Vietnam at a glance

Capital: Hanoi
Population: 85.26 million
Government Type: Communist State

GDP: $222.5 billion (2007 estimate)
Imports: $60.75 billion f.o.b. (2007 estimate)
Exports: $48.3 billion f.o.b. (2007 estimate)

In the past decade, Vietnam has recognized the increasing importance of global economic interdependence and has made concerted efforts to adjust its foreign relations to reflect the evolving international economic and political situation in Southeast Asia. The country has begun to integrate itself into the regional and global economy by joining international organizations. On January 11, 2007, Vietnam joined the World Trade Organization (WTO). Vietnam has stepped up its efforts to attract foreign capital from the West and regularize relations with the world financial system. The country has also expanded trade with its East Asian neighbors as well as with countries in Western Europe and North America.

Vietnam - U.S. Relations

U.S. relations with Vietnam have become deeper and more diverse in the years since political normalization. The two countries have broadened their political exchanges through regular dialogues on human rights and regional security. They signed a Bilateral Trade Agreement in July 2000, which went into force in December 2001. In 2003, the two countries signed a Counter-narcotics Letter of Agreement (amended in 2006), a Civil Aviation Agreement, and a textile agreement. In January 2007, the U.S. Congress approved Permanent Normal Trade Relations (PNTR) for Vietnam. Since entry into force of the U.S.-Vietnam Bilateral Trade Agreement on December 10, 2001, increased trade between the U.S. and Vietnam, combined with large-scale U.S. investment in Vietnam, evidence the maturing U.S.-Vietnam economic relationship. Other signs of the expanding bilateral relationship are a Bilateral Air Transport Agreement signed in December 2003 and a Bilateral Maritime Agreement signed in March 2007 that opened the maritime transport and services industry of Vietnam to U.S. firms. Cooperation in other areas, such as defense, nonproliferation, counterterrorism, and law enforcement, is also steadily growing.

Economy

Economic stagnation marked the period after the reunification of North and South Vietnam but, in 1986, the Sixth Party Congress approved a broad economic reform package called “Doi Moi” (renovation) that introduced market reforms and dramatically improved Vietnam’s business climate. Vietnam became one of the fastest-growing economies in the world. Vietnam’s consumer price index in 2006 was 7.5%. Average annual foreign investment commitment has risen sharply as a result of the U.S.-Vietnam Bilateral Trade Agreement and Vietnam’s drive toward membership in the World Trade Organization (WTO). The 2007 investment commitment is expected to have reached $10 billion, matching the $10 billion level of 2006. From 1990 to 2005, agricultural production nearly doubled, transforming Vietnam from a net food importer to the world’s second-largest exporter of rice.

While the country has moved toward a more market-oriented economy, the Vietnamese Government still holds a tight rein over major sectors of the economy through large state-owned enterprises and the banking system. The launch of the State Capital Investment Corporation at the end of 2005 is intended to make state-owned enterprises operate more competitively. The government has plans to reform key sectors and privatize state-owned enterprises, but implementation has been gradual. Greater emphasis on private-sector development is critical for job creation. Urban unemployment has been rising in recent years, and rural unemployment, estimated to be between 25% and 35% during non-harvest periods, is already at critical levels.

The entry into force of the Bilateral Trade Agreement (BTA) between the U.S. and Vietnam was a significant milestone for Vietnam’s economy. Implementation of this agreement, which includes provisions on trade in goods, trade in services, enforcement of intellectual property rights, protection for investments, and transparency, fundamentally changed Vietnam’s trade regime and helped liberalize its economy. By requiring a range of reforms to Vietnam’s trade and investment regime, the BTA also helped Vietnam prepare for its membership in the World Trade Organization. Vietnam formally acceded to the WTO as its 150th member on January 11, 2007. To meet the obligations of WTO membership, Vietnam revised nearly all of its trade and investment laws and guiding regulations.

Best Export Opportunities

Strong economic growth, ongoing reform and a large population of 85 million — half of whom are under the age of 30 — have combined to create a dynamic and quickly evolving commercial environmentm. Sales of equipment and technologies associated with growth in Vietnam’s industrial sector and implementation of major infrastructure projects continue to be a major source of commercial activity for U.S. firms. Aviation, telecommunications, information technology, oil and gas exploration, and power generation will continue to offer the most promising opportunities for U.S. companies over the next few years as infrastructure needs continue to expand with Vietnam’s pursuit of rapid economic development. Key U.S. agricultural inputs to production, such as hardwood lumber, cotton, hides and skins, and feed ingredients, also continue to play a key role in helping fuel Vietnam’s export-led manufacturing strategy. Detailed information for U.S. suppliers on Vietnam’s promising import markets may be found in the Country Trade Sourcebook’s Best Export Opportunities for Vietnam.

Transportation

Travel within Vietnam is becoming easier, with more domestic flights to the major cities. A round trip ticket between Ho Chi Minh City and Hanoi is currently about $190 for economy class and $380 for business class. Vietnam Airlines and Pacific Airlines are the only carriers currently flying domestic routes. Trains and buses in Vietnam have extensive routes and offer a cheap way to travel. You get what you pay for, however. Traveling by train or bus is recommended only to the most seasoned and hardy of travelers, as it is uncomfortable and (due to infrastructure and maintenance problems) potentially dangerous.

Map of Vietnam

Czech Republic at a glance

Capital: Prague
Population: 10.23 million
Government Type: Parliamentary democracy

GDP: $249.1 billion (2007 estimate)
Imports: $109.8 billion f.o.b. (2007 estimate)
Exports: : $113 billion f.o.b. (2007 estimate)

The Czech Republic is one of the most stable and prosperous of the post-communist states of Central and Eastern Europe. Domestic demand is playing an ever more important role in underpinning growth as the availability of credit cards and mortgages increases. The current account deficit has declined to around 3.3% of GDP because demand for automotive and other products from the Czech Republic remains strong in the European Union. Rising inflation from higher food and energy prices are a risk to balanced economic growth. Intensified restructuring among large enterprises, improvements in the financial sector, and effective use of available EU funds should strengthen output growth. The government has withdrawn a 2010 target date for adoption of the euro and instead aims to meet the Eurozone criteria around 2012.

Czech Republic - U.S. Relations

Millions of Americans have their roots in Bohemia and Moravia, and a large community in the United States has strong cultural and familial ties with the Czech Republic. The United States played a major role in the establishment of the original Czechoslovak state on October 28, 1918. Tomas Masaryk, the father of the state and its first president, used the U.S. Constitution as a model for the first Czechoslovak constitution. Normal relations continued until 1948, when the communists seized power. Relations cooled rapidly. The Soviet invasion of Czechoslovakia in August 1968 further complicated U.S.-Czechoslovak relations.

Since the “Velvet Revolution” of 1989, bilateral relations have improved immensely. Dissidents once sustained by U.S. encouragement and human rights policies have reached high levels in the government. The U.S. government has actively encouraged political and economic transformation. The United States recognized both the Czech Republic and Slovakia on January 1, 1993. Since then, U.S.-Czech relations have remained strong economically, politically, and culturally.

Best Export Opportunities

U.S. exporters will find many opportunities in the Czech Republic. Agricultural products such as dried fruits and nuts, seafood, and wine are in demand. Pollution control is gaining more interest since the country’s accession to the EU has introduced new environmental laws, and increasing use of cell phones and the Internet is boosting telecommunications sales. For further information on promising exports to the Czech Republic, visit the Country Trade Sourcebook’s Best Export Opportunities section for the Czech Republic.

Economy

Of the former communist countries in central and eastern Europe, the Czech Republic has one of the most developed and industrialized economies. The country’s strategic location in Europe, low cost structure, and skilled work force have attracted strong inflows of foreign direct investment (FDI). This investment is rapidly modernizing its industrial base and increasing productivity. The principal industries are motor vehicles, machine-building, iron and steel production, metalworking, chemicals, electronics, transportation equipment, textiles, glass, brewing, china, ceramics, and pharmaceuticals. The main agricultural products are sugar beets, fodder roots, potatoes, wheat, and hops. As a small, open economy in the heart of Europe, economic growth is strongly influenced by demand for Czech exports and FDI flows.

At the time of the 1948 communist takeover, Czechoslovakia had a balanced economy and one of the h