| Country | Economy - overview |
| Libya | 
The Libyan economy depends primarily upon revenue from hydrocarbons, which contribute about 95% of export earnings, 65% of GDP, and 80% of government revenue. Substantial revenue from the energy sector coupled with a small population give Libya one of the highest per capita GDPs in Africa, but little of this income flowed to the lower orders of society. Libya in the past five years made progress on economic reform as part of a broader campaign to reintegrate the country into the international fold. This effort picked up steam after UN sanctions were lifted in September 2003 and after Libya announced in December 2003 that it would abandon programs to build weapons of mass destruction. The process of lifting US unilateral sanctions began in the spring of 2004; all sanctions were removed by June 2006, helping Libya attract greater foreign direct investment, especially in the energy sector. Libyan oil and gas licensing rounds drew high international interest, but new rounds are unlikely until Libya establishes a more permanent government. The National Oil Corporation (NOC) set a goal of nearly doubling oil production to 3 million bbl/day by 2012, but the goal is unlikely to be met by the target date. Libya faces a long road ahead in liberalizing its primarily socialist economy, but the revolution probably increases the opportunity for entrepreneurial activity and the evolution of a more market-based economy. The service and construction sectors, which account for roughly 20% of GDP, expanded over the past five years and could become a larger share of GDP after political volatility subsides. Climatic conditions and poor soils severely limit agricultural output, and Libya imports about 75% of its food. Libya's primary agricultural water source remains the Great Manmade River Project, but significant resources will be needed in desalinization to meet growing water demands. |
| Liechtenstein |
Despite its small size and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and likely the second highest per capita income in the world. The Liechtenstein economy is widely diversified with a large number of small businesses. Low business taxes - the maximum tax rate is 20% - and easy incorporation rules have induced many holding companies to establish nominal offices in Liechtenstein providing 30% of state revenues. The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. It imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the EU) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe. Since 2008, Liechtenstein has faced renewed international pressure - particularly from Germany - to improve transparency in its banking and tax systems. In December 2008, Liechtenstein signed a Tax Information Exchange Agreement with the US. Upon Liechtenstein's conclusion of 12 bilateral information-sharing agreements, the OECD in October 2009 removed the principality from its "grey list" of countries that had yet to implement the organization's Model Tax Convention. By the end of 2010, Liechtenstein had signed 25 Tax Information Exchange Agreements or Double Tax Agreements. In 2011 Liechtenstein joined the Schengen area, which allows passport-free travel across 26 European countries. |
| Lithuania |
Lithuania gained membership in the World Trade Organization and joined the EU in May 2004. Despite Lithuania's EU accession, Lithuania's trade with its Central and Eastern European neighbors, and Russia in particular, accounts for a significant share of total trade. Foreign investment and business support have helped in the transition from the old command economy to a market economy. Lithuania's economy grew on average 8% per year for the four years prior to 2008 driven by exports and domestic demand. However, GDP plunged nearly 15% in 2009 - the three former Soviet Baltic republics were among the hardest hit by the 2008-09 financial crisis. In 2009, the government launched a high-profile campaign, led by Prime Minister KUBILIUS, to attract foreign investment and to develop export markets, and the government's steadfast commitment to broad economic reforms has been vital in Lithuania's quick recovery from a deep recession, although unemployment - at 16.2%in 2011 - remains stubbornly high. Lithuania in 2011 began to unbundle its energy networks in order to reduce its dependence on Russian energy. |
| Luxembourg |
This small, stable, high-income economy - benefiting from its proximity to France, Belgium, and Germany - has historically featured solid growth, low inflation, and low unemployment. The industrial sector, initially dominated by steel, has become increasingly diversified to include chemicals, rubber, and other products. Growth in the financial sector, which now accounts for about 28% of GDP, has more than compensated for the decline in steel. Most banks are foreign-owned and have extensive foreign dealings, but Luxembourg has lost some of its advantages as a tax haven because of OECD and EU pressure. The economy depends on foreign and cross-border workers for about 60% of its labor force. Luxembourg, like all EU members, suffered from the global economic crisis that began in late 2008, but unemployment has trended below the EU average. Following strong expansion from 2004 to 2007, Luxembourg's economy contracted 3.6% in 2009, but rebounded in 2010-11. The country continues to enjoy an extraordinarily high standard of living - GDP per capita ranks among the highest in the world, and is the highest in the euro zone. Turmoil in the world financial markets and lower global demand during 2008-09 prompted the government to inject capital into the banking sector and implement stimulus measures to boost the economy. Government stimulus measures and support for the banking sector, however, led to a 5% government budget deficit in 2009. Nevertheless, the deficit was cut to 1.1% in 2011. Even during the financial crisis and recovery, Luxembourg retained the highest current account surplus as a share of GDP in the euro zone, owing largely to their strength in financial services. Public debt remains among the lowest of the region although it has more than doubled since 2007 as percentage of GDP. |
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This page was last updated on 3 February, 2012 |
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