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Background Notes : Ukraine

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April 25, 2011Bureau of European and Eurasian Affairs

Background Note: Ukraine



Official Name: Ukraine



PROFILE

Geography
Area: 233,000 sq. mi., the largest country wholly in Europe.
Cities: Capital--Kyiv (also transliterated as Kiev, pop. 2.8 million). Other cities--Kharkiv, Dnipropetrovsk, Donetsk, Odesa, Lviv.
Terrain: A vast plain mostly bounded by the Carpathian mountains in the southwest and by the Black Sea and the Sea of Azov in the South.
Climate: Continental temperate, except in southern Crimea, which has a sub-tropical climate.

People
Population (est.): 45.8 million.
Nationality: Noun--Ukrainian(s); adjective--Ukrainian.
Ethnic groups: Ukrainians, Russians, Belarusians, Moldovans, Bulgarians, Hungarians, Romanians, Jews, Poles, Crimean Tatars, and other groups.
Religions: Ukrainian Orthodoxy, Ukrainian Greek Catholicism, Judaism, Roman Catholicism, Islam, others.
Languages: Ukrainian (official), Russian, others.
Education: Literacy--99.4%.
Health: Infant mortality rate--8.73/1,000; life expectancy--62.56 yrs. males, 74.74 yrs. females.
Work force: 20.2 million. Industry--18.5%; agriculture--15.8%; services--65.7%.

Government
Type: Presidential-parliamentary.
Independence: August 24, 1991.
Constitution: First post-Soviet constitution adopted June 28, 1996.
Branches: Executive--president, prime minister, cabinet. Legislative--450-member unicameral parliament, the Supreme Rada (members elected to 5-year terms from party lists by proportional vote). Judicial--Supreme Court, Courts of Appeal, local courts, and Constitutional Court.
Political parties: Wide range of active political parties and blocs, from leftist to center and center-right to ultra-nationalist.
Suffrage: Universal at 18.
Administrative subdivisions: 24 provinces (oblasts), Crimean autonomous republic, and two cities with special status--Kyiv and Sevastopol.

Economy
Purchasing power parity GDP (2010 est.): $303.8 billion.
Nominal GDP (2010 est.): $137.3 billion.
Annual growth rate (2010 est.): 4.2%.
PPP per capita GDP (2010 est.): $6,700.
Nominal per capita GDP (2010 est.): $3,005.
Natural resources: Vast fertile lands, coal, iron ore, various large mineral deposits, timber.
Agriculture: Products--Grain, sugar beets, sunflower seeds, vegetables/legumes, beef, and milk.
Industry: Types--Coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, and food processing.
Trade (2009): Exports of goods and services--$52.12 billion: ferrous and nonferrous metals, fuel and petroleum products, chemicals, machinery and transport equipment, and food products. Imports--$60.52 billion: energy, machinery and equipment, and chemicals.

PEOPLE
The population of Ukraine is about 45.8 million. Ethnic Ukrainians make up approximately 78% of the total; ethnic Russians number about 17%, ethnic Belarusians number about 0.6%. The industrial regions in the east and southeast are the most heavily populated, and the population is about 68% urban. Ukrainian and Russian are the principal languages. Although Russian is very widely spoken, in the 2001 census (the latest official figures) 85.2% of the ethnic Ukrainian population identified Ukrainian as their native language. There are also small Tatar and Hellenic minorities centered mainly in Crimea. The dominant religions are the Ukrainian Orthodox Church and the Ukrainian Greek Catholic Church (which practices Orthodox rites but recognizes the Roman Catholic Pope as head of the Church). The Ukrainian Orthodox Church is divided between a Moscow Patriarchate and a separate Kyiv Patriarchate, which was established after Ukrainian independence and which declared independence from Moscow. In addition to these, there are also the Ukrainian Autocephalous Orthodox Church and representatives of the Russian Orthodox Church Abroad.

About 70% of adult Ukrainians have a secondary or higher education. Ukraine has about 150 colleges and universities, of which the most important are in Kyiv, Lviv, and Kharkiv. There are about 70,000 scholars in 80 research institutes.

HISTORY
The first identifiable groups to populate what is now Ukraine were Cimmerians, Scythians, Sarmatians, and Goths, among other nomadic peoples who arrived throughout the first millennium B.C. These peoples were well known to colonists and traders in the ancient world, including Greeks and Romans, who established trading outposts that eventually became city-states. Slavic tribes occupied central and eastern Ukraine in the sixth century A.D. and played an important role in the establishment of Kyiv. Kievan Rus Prince Volodymyr converted the Kievan nobility and most of the population to Christianity in 988. Situated on lucrative trade routes, Kyiv quickly prospered as the center of the powerful state of Kievan Rus. In the 11th century, Kievan Rus was the largest state in Europe. Conflict among the feudal lords led to decline in the 12th century. Mongol raiders razed Kyiv in the 13th century.

Most of the territory of what is modern Ukraine was annexed by Poland and Lithuania in the 14th century, but during that time, Ukrainians began to conceive of themselves as a distinct people, a feeling that survived subsequent partitioning by greater powers over the next centuries. Ukrainian peasants who fled the Polish effort to force them into servitude came to be known as Cossacks and earned a reputation for their fierce martial spirit and love of freedom. When Poland was partitioned in the late 18th century, much of modern-day Ukraine was integrated into the Russian Empire.

The 19th century found the region largely agricultural, with a few cities and centers of trade and learning. The region was under the control of the Austro-Hungarian Empire in the extreme west and the Russian Empire elsewhere. Ukrainian writers and intellectuals were inspired by the nationalistic spirit stirring other European peoples existing under other imperial governments and were determined to revive Ukrainian linguistic and cultural traditions. Taras Shevchenko (1814-1861), national hero of Ukraine, presented the intellectual maturity of the Ukrainian language and culture through his work as a poet and artist. The Russian Government, however, imposed strict limits on attempts to elevate Ukrainian culture, even banning the use and study of the Ukrainian language.

When World War I and the Russian revolution shattered the Habsburg and Russian empires, Ukrainians declared independent statehood. In 1917 the Central Rada proclaimed Ukrainian autonomy and in 1918, following the Bolshevik seizure of power in Petrograd, the Ukrainian National Republic declared independence under President Mykhaylo Hrushevsky. After 3 years of conflict and civil war, however, the western part of Ukrainian territory was incorporated into Poland, while the larger, central and eastern regions were incorporated into the Soviet Union. The Ukrainian Soviet Socialist Republic was officially created in 1922.

Ukrainian culture and education flourished during the twenties, but with Stalin's rise to power and the campaign of forced collectivization beginning in 1929, the Soviet leadership imposed a campaign of terror that ravaged the intellectual class. The Soviet Government under Stalin also created an artificial famine (called “Holodomor” in Ukrainian) as part of his forced collectivization policies, which killed millions of previously independent peasants and others throughout the country. Estimates of deaths in Ukraine from the 1932-33 Holodomor alone range from 3 million to 7 million.

When the Nazis invaded the Soviet Union in 1941, some Ukrainians, particularly in the west, welcomed what they saw as liberation from Communist rule, but this did not last as they quickly came to understand the nature of Nazi rule. Nazi brutality was directed principally against Ukraine's Jews (of whom an estimated 1 million were killed), but also against many other Ukrainians. Babyn Yar in Kyiv was the site of one of the most horrific Nazi massacres of Ukrainian Jews, ethnic Ukrainians, and many others. Kyiv and other parts of the country were heavily damaged.

After the Nazi and Soviet invasions of Poland in 1939, the western Ukrainian regions were incorporated into the Soviet Union. Armed resistance against Soviet authority continued as late as the 1950s. During periods of relative liberalization--as under Nikita Khrushchev from 1955 to 1964 and during the period of "perestroika" under Mikhail Gorbachev--Ukrainian communists cautiously pursued nationalist objectives. The 1986 explosion at the Chornobyl (Chernobyl in Russian) nuclear power plant, located in the Ukrainian SSR, and the Soviet Government's initial efforts to conceal the extent of the catastrophe from its own people and the world, were a watershed for many Ukrainians in exposing the severe problems of the Soviet system. Ukraine became an independent state on August 24, 1991, and was a co-founder of the Commonwealth of Independent States (CIS) following the dissolution of the Soviet Union, although it has not officially joined the organization.

GOVERNMENT AND POLITICAL CONDITIONS
Ukraine has a presidential-parliamentary system of government with separate executive, judicial, and legislative branches. The prime minister is appointed by the president with the consent of more than one-half of the parliament. The prime minister, first deputy prime minster, three deputy prime ministers, and cabinet ministers are appointed by the president based on a submission by the prime minister. The Supreme Council (Verkhovna Rada) initiates legislation, ratifies international agreements, and approves the budget. Its members are elected to 5-year terms, with the next Rada election occurring in October 2012.

Following free elections held on December 1, 1991, Leonid M. Kravchuk, former chairman of the Ukrainian Rada, was elected to a 5-year term as Ukraine's first president. At the same time, a referendum on independence was approved by more than 90% of the voters. Shortly after becoming independent, Ukraine named a parliamentary commission to prepare a new constitution, adopted a multi-party system, and adopted legislative guarantees of civil and political rights for national minorities. A new, democratic constitution was adopted on June 28, 1996, mandating a pluralistic political system with protection of basic human rights and liberties.

Amendments to the 1996 constitution were adopted during the 2004 "Orange Revolution" and took effect in January 2006, shifting significant powers from the president to the prime minister and Supreme Rada. On October 1, 2010, the Constitutional Court in a closed-door ruling announced that the 2004 amendments were unconstitutional because procedures used to adopt them violated the constitution. The court reinstated the 1996 constitution, which granted greater powers to the presidency, returning the government to a presidential-parliamentary system.

The constitution and laws provide for freedom of speech and of the press, and individuals have been able criticize the government publicly and privately. Following changes in government leadership after 2010 presidential elections, there have been reports that central authorities have attempted to direct media content. While independent and international media have been active and have expressed a wide variety of opinions, government pressure on both independent and state-owned media has caused some journalists and media owners to practice self-censorship on matters that the government has deemed sensitive. There have also been reports of intimidation and violence against journalists by national and local officials. Although private media outlets operate on a commercial basis and have generally operated free of direct state control or interference, private newspapers often depend on their owners (political patrons or oligarchs with government connections) for revenue and have not enjoyed editorial independence.

Freedom of religion is guaranteed by law, although religious organizations are required to register with local authorities and with the central government. There is no formal state religion. Minority rights are respected in accordance with a 1991 law guaranteeing ethnic minorities the right to schools and cultural facilities and the use of national languages in conducting personal business. According to the constitution, Ukrainian is the only official state language. In Crimea and some parts of eastern Ukraine--areas with substantial ethnic Russian minorities--local and regional governments permit Russian as a language for local official correspondence.

The Crimean peninsula is home to a number of pro-Russian political organizations that advocate secession of Crimea from Ukraine and annexation to Russia. Crimea was ceded by the Russian Soviet Federated Socialist Republic (RSFSR) to the Ukrainian SSR in 1954, in recognition of historic links and for economic convenience, to mark the 300th anniversary of Ukraine's union with Russia. In July 1992, the Crimean and Ukrainian parliaments determined that Crimea would remain under Ukrainian jurisdiction while retaining significant political, economic, and cultural autonomy.

Recent Elections
The campaign leading to the October 31, 2004, presidential election was characterized by widespread violations of democratic norms, including government intimidation of the opposition and of independent media, abuse of state administrative resources, highly skewed media coverage, and numerous provocations. The two major candidates--Prime Minister Viktor Yanukovych and opposition leader (and former Prime Minister) Viktor Yushchenko--each garnered between 39% and 40% of the vote and proceeded to a winner-take-all second round. The November 21 runoff election was marred by credible reports of widespread and significant violations, including illegal expulsion of opposition representatives from election commissions, multiple voting by busloads of people, abuse of absentee ballots, reports of coercion of votes in schools and prisons, and an abnormally high number of (easily manipulated) mobile ballot box votes. Hundreds of thousands of people took to the streets of Kyiv and other cities to protest electoral fraud and express support for Yushchenko, and conducted ongoing peaceful demonstrations during what came to be known as the "Orange Revolution."

The Organization for Security and Cooperation in Europe (OSCE) International Election Observation Mission found that the November 21 run-off election "did not meet a considerable number of OSCE commitments and Council of Europe and other European standards for democratic elections." Other independent observers were similarly critical. On November 24, the Central Election Commission (CEC) declared Yanukovych the winner with 49.46% compared to 46.61% for Yushchenko. The U.S. and Europe refused to accept the result as legitimate due to the numerous, uninvestigated reports of fraud. On November 27, Ukraine's Supreme Rada passed a resolution declaring that the election results as announced did not represent the will of the people. On December 1, the Rada passed a vote of "no confidence" in the government. On December 3, Ukraine's Supreme Court invalidated the CEC's announced results and mandated a repeat of the second round vote to take place on December 26. An agreement mediated by European leaders resulted in new legislation being passed by the Rada and signed by the President December 8. The electoral law was reformed to close loopholes that had permitted pervasive electoral fraud.

The December 26 re-vote took place in an atmosphere of calm. While irregularities were noted, observers found no systemic or massive fraud. On January 10, 2005, after the CEC and the Supreme Court had considered and rejected numerous complaints and appeals filed by the Yanukovych campaign, the CEC certified the results: Yushchenko had won 51.99% of the votes, with 44.20% for Yanukovych. President Yushchenko was inaugurated January 23, 2005.

Ukraine held parliamentary and local elections on March 26, 2006. International observers noted that conduct of the Rada election was in line with international standards for democratic elections, making this the most free and fair in Ukraine's history. Pre-term parliamentary elections were held on September 30, 2007, and international observers judged this vote to be in line with international democratic standards in an open and competitive environment. The new coalition formed on December 18, 2007 nominated Yulia Tymoshenko as Prime Minister; she was confirmed December 18, 2007. Beginning in 2008, the Rada experienced chronic deadlock, which was exacerbated by a feud between then-Prime Minister Yulia Tymoshenko and then-President Viktor Yushchenko.

The first round of Ukraine’s 2010 presidential election took place on January 17. International and domestic observers assessed the vote as having met most international standards. As no candidate received 50% or more of the vote, the two candidates with the most votes--opposition leader Viktor Yanukovych (35%) and Prime Minister Yulia Tymoshenko (25%)--progressed to a second-round runoff. The second round took place on February 7 in a vote that observers again assessed as largely free and fair. On February 14, the Central Election Commission announced that Viktor Yanukovych had won the election with 49% of the vote, compared to Yulia Tymoshenko’s 46%. Alleging fraud, Tymoshenko initially appealed, but then withdrew her appeal on February 20 saying that the court would not consider her appeal fairly. Yanukovych was inaugurated as President on February 25, and on March 11, the Party of Regions, the Communists, the Lytvyn Bloc, and 16 non-aligned members of parliament (MPs) established the “Stability and Reform” ruling coalition in the Rada composed of 235 MPs. Also on March 11, the Rada confirmed President Yanukovych’s nomination of Mykola Azarov as Prime Minister and replaced the entire cabinet of ministers. Opposition MPs and others argued the coalition had been formed illegally, as a coalition could only be composed of factions, not individuals. The Constitutional Court of Ukraine ruled on April 8 that the Party of Regions-led coalition was constitutional, stating that individuals MPs do in fact have the right to take part in forming parliamentary coalitions. The ruling consolidated the position of the Azarov government.

Ukraine held local elections on October 31, 2010. International and local election observers concluded that overall the elections did not meet standards for openness and fairness set by the presidential elections earlier in the year. Observers noted shortcomings such as insufficient training for electoral commission members, which contributed to procedural violations and organizational problems. In particular, the registration of fraudulent Batkivshchyna Party candidate lists led to the disqualification of all Batkivshchyna Party candidates in the Kyiv and Lviv oblast council elections, preventing the main opposition party from running for election in regions where it had considerable support. Election observers also reported incidences of law enforcement authorities pressuring monitors and candidates, and election officials selectively barring or removing candidates from ballots.

There was a sharp increase in criminal charges brought against opposition politicians after the appointment of a new prosecutor general in November 2010, giving rise to concerns of selective and politically-motivated prosecution by the Yanukovych administration. At the end of 2010 and beginning of 2011, prosecutors brought charges against former Prime Minister Yulia Tymoshenko and many members of her government for abuse of office and/or misuse of state funds during their tenure. The questioning of charged individuals by government prosecutors, which often lasted for hours at a time over a period of several days, and denial of bail in certain cases, further exacerbated the perception of selective prosecution. However, the government contended that the prosecutions were not targeted toward the opposition, and that there were many ongoing investigations against members of the governing party.

Principal Government Officials
President--Viktor F. Yanukovych
Prime Minister--Mykola Azarov
Foreign Minister--Kostyantyn Gryshchenko
Speaker of the Rada (Parliament)--Volodymyr Lytvyn

Ukraine maintains an embassy at 3350 M Street NW, Washington, DC 20007 (tel. 202-349-2920).

ECONOMY
With rich farmlands, a well-developed industrial base, highly trained labor force of 20 million, and good education system, Ukraine has the potential to become a major European economy. After a robust 8-year expansion beginning in 2000 that saw real GDP expand 75%, Ukraine’s economy experienced a sharp slowdown in late 2008, which continued through 2009. After contracting 15.1% in 2009, GDP is estimated to have bounced back only 4.2% in 2010 and is forecast to grow between 4.0% and 4.6% in 2011.

Ukraine’s economy remains burdened by excessive government regulation, corruption, and lack of law enforcement, and while the government has taken steps against corruption and small and medium enterprises have been largely privatized, much remains to be done to restructure and privatize key sectors such as energy and to create a market system for agricultural land. President Yanukovych chairs a Committee on Economic Reform, and in 2010 Ukraine developed an economic reform plan for 2010-2014. In December 2010 a comprehensive new tax code was passed by parliament and signed into law, provoking major street protests in Kyiv.

Ukraine ostensibly encourages foreign trade and investment. Foreigners have the right to purchase businesses and property, to repatriate revenue and profits, and to receive compensation in the event property were to be nationalized by a future government. However, the country's complex laws and regulations, poor corporate governance, weak enforcement of contract law by courts, and particularly corruption have discouraged broad foreign direct investment in Ukraine. While there is a functioning stock market, the lack of protection for minority shareholder rights severely restricts portfolio investment from abroad.

Ukraine abounds in natural resources and industrial production capacity. Although proven onshore and offshore oil and natural gas reserves are limited, there is now interest in oil exploration in the Ukrainian portion of the Black Sea as well as prospecting for shale gas. The country has other important energy sources, such as coal, and large mineral deposits, and is one of the world's leading energy transit countries, providing transportation of Russian gas across its territory. Ukraine imports almost 80% of its oil and 77% of its natural gas. Russia ranks as Ukraine's principal supplier of oil, and Russian firms now own and/or operate the majority of Ukraine's refining capacity. Natural gas imports currently come from Russia, Turkmenistan, Kazakhstan, and Uzbekistan, which deliver the gas to Ukraine's border through a pipeline system owned and controlled by Gazprom, Russia's state-owned gas monopoly. Ukraine owns and operates the gas pipelines on its territory, which are also used to transit Russian gas to Western Europe. Ukraine's laws forbid the sale of the gas pipeline network. The complex relationship between supplier, transporter, and consumer has led to intermittent bilateral tensions, resulting in severe gas supply disruptions for downstream consumers in 2006 and January 2009. In April 2010, the Rada ratified the Kharkiv gas-for-basing agreement in which Ukraine agreed to extend the Russian Black Sea Fleet’s basing rights in Sevastopol for an additional 25 years (until 2042) in exchange for concessional pricing of Ukraine’s imports of Russian gas.

Ukraine’s economy is heavily dependent on its exports, which make up about 40% of its gross domestic product. While countries of the former Soviet Union remain important trading partners, especially Russia for energy imports, Ukraine's trade is becoming more diversified. The European Union (EU) accounts for about 30% of Ukraine's trade, while CIS countries account for about 40%. Ukraine has a broad industrial base, including much of the former U.S.S.R.'s space and rocket industry. The country has a major ferrous metal industry, producing cast iron, steel, and steel pipe, and its chemical industry produces coke, mineral fertilizers, and sulfuric acid. Manufactured goods include airplanes, turbines, metallurgical equipment, diesel locomotives, and tractors. World demand for steel and chemicals began to recover in 2009 after dropping sharply in the second half of 2008, and Ukraine's suppliers experienced nearly 50% year-on-year export growth at the start of 2011. Steel constitutes nearly 40% of exports. Ukraine is also a major producer of grain, sunflower seeds, and beet sugar. In October 2010, Ukraine introduced grain export quotas. The distribution of these quotas in November 2010 and January 2011 was highly non-transparent and discriminatory to foreign grain trading companies, which did not receive allocations.

In July 2010, following extended negotiations, the International Monetary Fund (IMF) approved a second loan package to Ukraine, after an earlier package negotiated in 2008 went off-track. The new 29-month $15.2 billion Stand-By Arrangement (SBA) is primarily conditioned on adjustments in fiscal and monetary policy, consumer gas price increases, and pension reform. Disbursement of SBA funds was postponed as of March 2011 until the Ukrainian Government meets its commitments on enacting reforms. The World Bank has committed more than $5 billion to Ukraine since the country joined the Bank in 1992.

Ukraine is a member of the European Bank for Reconstruction and Development (EBRD) and joined the World Trade Organization (WTO) in May 2008. In 2008 Ukraine and the European Union launched negotiations on a free trade agreement. As an interim step to an EU association agreement, Ukraine hopes to conclude with the EU a deep and comprehensive free trade agreement (DCFTA) as well as an agreement on visa liberalization. Some chapters, including trade, remain under negotiation.

Environmental Issues
Ukraine is interested in cooperating on regional environmental issues. Conservation of natural resources is a stated high priority, although implementation suffers from a lack of financial resources. Ukraine established its first nature preserve, Askania-Nova, in 1921 and has a program to breed endangered species.

Ukraine has significant environmental problems, especially those resulting from the Chornobyl nuclear power plant disaster in 1986 and from industrial pollution. In accordance with its agreement with the G7 and European Commission in 1995, Ukraine permanently closed the last operating reactor at the Chornobyl site on December 15, 2000. All urgent and required stabilization measures of the "sarcophagus"--the concrete shelter hastily built around the damaged reactor by the Soviet Union in the months following the disaster--including radiation and worker safety are complete. The contract for construction of a new shelter to be built around the sarcophagus was awarded in September 2007. Construction for the new shelter has begun, with the ultimate goal of its commissioning in 2014. The successful commissioning of the new shelter will provide a long-term, environmentally sound solution for the destroyed reactor. It should be noted that none of the 15 operating reactors in Ukraine, which generate about half of the country's electricity, are of the Chornobyl design. The United States Government has provided significant assistance to enhance the operational and nuclear safety of these reactors. Ukraine has a pollution fee system, which levies taxes on air and water emissions and solid waste disposal. The resulting revenues are channeled to environmental protection activities, but enforcement of this pollution fee system is lax. Ukraine ratified the Kyoto Protocol in April 2004, and associated with the Copenhagen Accord on Climate Change in April 2010.

Construction of a shipping canal through a UN-protected core biosphere reserve in the Danube Delta, which began in May 2004, is an environmental issue of international interest.

DEFENSE
After independence, Ukraine established its own military forces of about 780,000 from the troops and equipment inherited from the Soviet Union. Security forces are controlled by the president, although they are subject to investigation by a permanent parliamentary commission. Surveillance is permitted for reasons of national security. Ukraine has stated that it is working to strengthen civilian control of the military, professionalize its non-commissioned officer (NCO) corps, modernize force structure to improve interoperability with NATO, and reduce troop numbers. Ukraine is contributing troops to missions in Iraq, Afghanistan, the Balkans, the Middle East, and Africa. Since November 1999, Ukrainian peacekeepers, with the support of the U.S. and other Allies, have been deployed in Kosovo as part of KFOR. Ukraine is currently providing 10 trainers for operations in Iraq and approximately 17 staff and medical officers to Afghanistan. Ukraine’s most significant contribution to peacekeeping operations is a 275-man helicopter squadron plus 3 observers with the UN Mission in Liberia.

In January 2008 Ukraine formally requested a NATO Membership Action Plan, noting that a final decision on membership would be determined by a national referendum. In April 2008, NATO allies stated that Ukraine would eventually become a member of the alliance and that its request for MAP would be considered at some point in the future. Under President Yanukovych, however, Ukraine passed the Law on the Foundation of Domestic and Foreign Policy, which states that Ukraine is a “non-bloc” state and is not pursuing membership in any defense alliances, including NATO. President Yanukovych has committed Ukraine to pursing close practical cooperation with NATO.

FOREIGN RELATIONS
The government has stated that it intends to pursue European integration, while also improving relations with Russia and strengthening its strategic partnership with the United States. Ukraine’s relations with the EU have been guided by the Partnership and Cooperation Agreement (PCA) since 1998. In March 2009, the European Council endorsed the Eastern Partnership (EaP) initiative to help the EU’s Eastern neighbors (Ukraine, Belarus, Moldova, Georgia, Azerbaijan, and Armenia) undertake political and economic reforms and to bring them closer to the EU. The EaP was launched in May 2009. At the November 2010 EU-Ukraine Summit President Yanukovych reiterated his desire to conclude an association agreement with the EU, but the negotiations that began in 2008 are still ongoing. Also at the summit, Ukraine and the EU signed an action plan on visa liberalization.

On January 31, 1992, Ukraine joined the then-Conference on Security and Cooperation in Europe (now the Organization for Security and Cooperation in Europe--OSCE). Ukraine will assume the OSCE Chairmanship in 2013.

Since the election of President Yanukovych, Ukraine has pursued improved relations with Russia. Ukraine’s relations with Russia have focused on energy security, natural gas prices, economic cooperation, border demarcation and delimitation, and issues related to the stationing of the Russian Black Sea Fleet in Sevastopol. In January 2009 Gazprom, the Russian natural gas producer, cut supplies to Ukraine. The cutoff developed into a crisis as both the gas supplies intended for consumption in Ukraine and those in transit to the rest of Europe were cut off for nearly a month. Ukraine was able to meet most of its domestic demand with reserves, but consumers in other European countries were left without gas for nearly 3 weeks. A hastily-negotiated agreement was signed with Russia on January 19, 2009, which called for market pricing for gas and transit and the elimination of intermediaries. After Yanukovych’s public statements calling for a “just price” for Russian gas imports, the Azarov government signed a sweeping 10-year agreement with Russia on April 21, 2010 to exchange a 25-year extension of the Russian Black Sea Fleet’s basing lease in Sevastopol for a discounted price on Russian gas imports. Since then, Ukraine has continued to negotiate with Russia for less expensive gas imports and lobbied for an end to Russia’s planned South Stream gas pipeline.

Ukraine maintains peaceful and constructive relations with all its neighbors, though there are some unresolved maritime issues along the Danube with Romania. Ukraine co-founded the Commonwealth of Independent States (CIS) on December 8, 1991, but in January 1993 it refused to endorse a draft charter strengthening political, economic, and defense ties among CIS members. Ukraine was a founding member of GUAM (Georgia-Ukraine-Azerbaijan-Moldova), and in February 2009, the office of the Organization for Democracy and Economic Development GUAM was opened in Kyiv. Soviet Ukraine joined the United Nations in 1945 as one of the original members following a Western compromise with the Soviet Union, which had asked for seats for all 15 of its union republics. In 2000-2001, Ukraine served as a non-permanent member of the UN Security Council. Ukraine has consistently supported peaceful, negotiated settlements to disputes. It has participated in the five-sided (now "5+2") talks on the conflict in Moldova. Ukraine has also advocated a return to democracy in neighboring Belarus and criticized the December 2010 post-election crackdown in Belarus. Ukraine has made a substantial contribution to UN peacekeeping operations since 1992.

U.S.-UKRAINIAN RELATIONS
The dissolution of the Soviet Union in December 1991 brought an end to the Cold War and created an opportunity to build bilateral relations with the New Independent States (NIS) as they began a political and economic transformation. On December 25, 1991, the United States officially recognized the independence of Ukraine. It upgraded its consulate in the capital, Kyiv, to embassy status on January 21, 1992. The U.S. ambassador to Ukraine is John Tefft, the seventh U.S. ambassador since Ukrainian independence.

The United States attaches great importance to the success of Ukraine's transition to a democratic state with a flourishing market economy. Ukraine's democratic "Orange Revolution" led to closer cooperation and more open dialogue between Ukraine and the United States. The United States granted Ukraine market economy status in February 2006. In March 2006, the United States terminated the application of the Jackson-Vanik amendment to Ukraine, providing Ukraine permanent normal trade relations status. The United States and Ukraine signed a new Trade and Investment Cooperation Agreement (TICA) on April 1, 2008. The TICA established a forum for discussion of bilateral trade and investment relations and will help deepen those relations. U.S. policy remains centered on realizing and strengthening a democratic, prosperous, and secure Ukraine more closely integrated into Europe and Euro-Atlantic structures.

In December 2008, the United States signed the U.S.-Ukraine Charter on Strategic Partnership. The Charter highlights the importance of the bilateral relationship and outlines enhanced cooperation in the areas of defense, security, economics and trade, energy security, democracy, and cultural exchanges. The Charter also emphasizes the continued commitment of the United States to support enhanced engagement between NATO and Ukraine. To fulfill one of the key tenets of the charter, Vice President Joseph Biden and President Yushchenko established the Strategic Partnership Commission during Vice President Biden’s July 2009 visit to Kyiv. The commission’s first meeting took place December 9, 2009 in Washington, its second meeting took place in Kyiv on July 2, 2010 in conjunction with Secretary of State Hillary Clinton’s visit to Ukraine, and its third meeting took place in Washington on February 15, 2011. Secretary Clinton and Ukrainian Foreign Minister Kostyantyn Gryshchenko are the co-chairs of the Commission.

U.S. Assistance to Ukraine
A cornerstone for the continuing U.S. partnership with Ukraine and the other countries of the former Soviet Union has been the Freedom for Russia and Emerging Eurasian Democracies and Open Markets (FREEDOM) Support Act (FSA), enacted in October 1992. Ukraine has been a primary recipient of FSA assistance. Total U.S. assistance since independence has been more than $4.1 billion. U.S. assistance to Ukraine is targeted to promote political, security, and economic reform and to address urgent social and humanitarian needs. The U.S. has consistently encouraged Ukraine's transition to a democratic society with a prosperous market-based economy. For more detailed information on these programs, please see the annual report to Congress on "U.S. Government Assistance to and Cooperative Activities with Eurasia," which is available on the State Department's website at the following address: http://www.state.gov/p/eur/ace/. Information is also available on USAID's website at the address: http://www.usaid.gov.

In December 2009 Ukraine completed a 3-year $45 million Millennium Challenge Corporation (MCC) Threshold Program agreement. This program aimed to reduce corruption in the public sector through civil society monitoring and advocacy, judicial reform, increased government monitoring and enforcement of ethical and administrative standards, streamlining and enforcing regulations, and combating corruption in higher education. Information is available on the MCC website at the following address: http://www.mcc.gov/.

[Fact sheet on U.S. assistance to Ukraine.]

Principal U.S. Embassy Officials
Ambassador--John F. Tefft
Deputy Chief of Mission--Eric Schultz
Political Counselor--Colin Cleary
Economic Counselor--Chever Voltmer
Public Affairs Counselor--Christopher Fitzgerald
Consul General--Kathleen Hennessey
Management Counselor--Robert Needham
Commercial Officer--Cheryl Dukelow
USAID Mission Director--Janina Jaruzelski
Regional Security Officer--Marian Cotter
Department of Energy Director--Wayne Leach
Agricultural Attache--Ann Murphy
Defense Attache--Colonel Dennis Larm
Peace Corps Director--Douglass Teschner

The U.S. Embassy in Kyiv is at 10 Yuriy Kotsyubynsky Street, 01901 (tel. [380] (44) 490-4000). The Embassy's website is http://ukraine.usembassy.gov/.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Lesotho

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April 26, 2011Bureau of African Affairs

Background Note: Lesotho



Official Name: Kingdom of Lesotho



PROFILE

Geography
Area: 30,355 sq. km. (11,718 sq. mi.), about the size of Maryland.
Cities: Capital--Maseru (173,700). Other cities--Leribe (35,000), Mafeteng (32,900), Teyateyaneng (22,800), Mohale's Hoek (18,400).
Terrain: High veld, plateau, and mountains.
Climate: Temperate; summers hot, winters cool to cold; humidity generally low and evenings cool year round. Rainy season in summer, winters dry. Southern hemisphere seasons are reversed.

People
Nationality: Noun--Mosotho (sing.); Basotho (pl.). Adjective--Basotho.
Population (2009 est.): 1.88 million.
Annual population growth rate (2009 est.): 0.116%. (Note: the population growth rate is depressed by an HIV/AIDS prevalence rate estimated to be at approximately 23.2%.)
Ethnic groups: Basotho 99.7%; Europeans, Asians, and other (including Xhosa) 0.3%.
Religions: 90% Christian, including Roman Catholic (majority), Lesotho Evangelical, Anglican, other denominations; other religions include Islam, Hindu, indigenous.
Languages: Official--Sesotho and English. Other--Xhosa, Zulu.
Education: Years compulsory--7 (ages 6-13). Lesotho has free primary education (grades 1-7). Literacy (2003 est.)--84.8%.
Health: Infant mortality rate (2011 est.)--55.04/1,000. Life expectancy (2011 est.)--51.63 years.
Work force (2007 est.): 854,600.

Government
Type: Constitutional monarchy.
Constitution: April 2, 1993.
Independence: October 4, 1966.
Branches: Executive--monarch is head of state; prime minister is head of government and cabinet. Legislative--Bicameral parliament consists of elected Assembly and non-elected Senate. Judicial--High Court, Court of Appeals, Magistrate's Court, traditional and customary courts.
Administrative subdivisions: 10 districts.
Political parties: Lesotho Congress for Democracy (LCD), All Basotho Convention (ABC), Basotho National Party (BNP), Lesotho Peoples Congress (LPC), National Independent Party (NIP), Basutoland African Congress (BAC), Basutoland Congress Party (BCP), Lesotho Workers Party (LWP), Popular Front for Democracy (PFD), Marematlou Freedom Party (MFP), Christian Democratic Party (CDP), Kopanang Basotho Party (KBP), National Progressive Party (NPP), New Lesotho's Freedom Party (NLFP), Sefate Democratic Union (SDU), Social Democratic Party (SDP), United Party (UP), Basotho Democratic National Party (BDNP), Basotho Batho Democratic Party (BBDP), Lesotho Educational Party (LEP), National Democratic Party (NDP), and Senkatana Party (SP).
Suffrage: 18 years of age.
Central government budget (2010 est.): Revenues--$968.4 million. Expenditures--$1.193 billion.

Economy
GDP (2010 est.): $1.799 billion.
Annual growth rate (2010 estimate): 3.51%.
Per capita GDP (2010 est.): $1,700.
Average inflation rate (2010 est.): 6.1%.
Natural resources: Water, agricultural and grazing land, some diamonds and other minerals. Lesotho is an exporter of excess labor.
Agriculture (2010 est.): 7.1% of GDP. Products--corn, wheat, sorghum, pulses, barley, peas, beans, asparagus, wool, mohair, livestock. Arable land--11%.
Industry (2010 est.): 34.6% of GDP. Types--textiles, apparel assembly, food, beverages, handicrafts, construction, tourism.
Services: 58.2% of GDP.
Trade (2010 est.): Exports--$985 million. Types--clothing, furniture, footwear, live animals, and wool. Partners--South Africa, United States, Botswana, Swaziland, Namibia, EU, Madagascar. Imports (2010 est.)--$1.766 billion. Types--food, clothing, building materials, vehicles, machinery, medicines, petroleum products. Partners--South Africa, Asia, India, EU.
Fiscal year: April 1 - March 31.
Economic aid received (2008): $306 million. Primary donors--U.S., World Bank, IMF, EU, UN, U.K., and Ireland.

PEOPLE
More than 99% of Lesotho's population is ethnically Basotho; other ethnic groups include Europeans, Asians, and Xhosa. The country's population is 90% Christian, the majority of whom are Roman Catholic. Other religions are Islam, Hindu, and indigenous beliefs. Sesotho and English are official languages, and other languages spoken include Xhosa.

HISTORY
Lesotho gained independence from Britain on October 4, 1966. In January 1970 the ruling Basotho National Party (BNP) appeared set to lose the first post-independence general elections when Prime Minister Leabua Jonathan annulled the election. He refused to cede power to the Basotho Congress Party (BCP) and imprisoned its leadership.

The BNP ruled by decree until January 1986 when a military coup forced them out of office. The Military Council that came into power granted executive powers to King Moshoeshoe II, who was until then a ceremonial monarch. In 1990, however, the King was forced into exile after a falling out with the army. His son was installed as King Letsie III.

The chairman of the military junta, Major General Metsing Lekhanya, was ousted in 1991 and then replaced by Major General Phisoane Ramaema, who handed over power to a democratically elected government of the BCP in 1993. Moshoeshoe II returned from exile in 1992 as an ordinary citizen. After the return to democratic government, King Letsie III tried unsuccessfully to persuade the BCP government to reinstate his father (Moshoeshoe II) as head of state. In August 1994, Letsie III staged a coup which was backed by the military and deposed the BCP government. The new government did not receive full international recognition. Member states of the Southern African Development Community (SADC) engaged in negotiations aimed at the reinstatement of the BCP government. One of the conditions put forward by the King for the return of the BCP government was that his father should be re-installed as head of state. After protracted negotiations, the BCP government was reinstated and the King abdicated in favor of his father in 1995, but Moshoeshoe II died in a car accident in 1996 and was again succeeded by his son, Letsie III. The ruling BCP split over leadership disputes in 1997.

Prime Minister Ntsu Mokhehle formed a new party, the Lesotho Congress for Democracy (LCD), and was followed by a majority of members of parliament (MPs), which enabled him to form a new government. The LCD won the general elections in 1998 under the leadership of Pakalitha Mosisili, who had succeeded Mokhehle as party leader. Despite the elections being pronounced free and fair by local and international observers and a subsequent special commission appointed by SADC, the opposition political parties rejected the results.

Opposition protests in the country intensified, culminating in a violent demonstration outside the royal palace in August 1998. When junior members of the armed services mutinied in September, the government requested a SADC task force to intervene to prevent a coup and restore stability. A military group of South African and Botswana troops entered the country in September, put down the mutiny, and withdrew in May 1999. Looting, casualties, and widespread destruction of property followed.

An Interim Political Authority (IPA), charged with reviewing the electoral structure in the country, was created in December 1998. The IPA devised a proportional electoral system to ensure that there would be opposition in the National Assembly. The new system retained the existing 80 elected Assembly seats, but added 40 seats to be filled on a proportional basis. Elections were held under this new system in May 2002, and the LCD won again. However, for the first time, due to the inclusion of proportional seats, opposition political parties won significant numbers of seats. The February 2007 elections resulted in another LCD victory. While acknowledging the LCD victory, opposition parties continued to assert that some of the proportional seats were allocated incorrectly. Nine parties hold all 40 of the proportional seats. The National Independent Party (NIP) formed an “informal alliance” with the LCD, leading to its share of 21, the largest of any minority party. The LCD has 63 (following the floor-crossing of an ABC member of parliament in March 2009) of the 80 constituency-based seats, and the All Basotho Convention (ABC) holds 15 after another MP broke away to form his own political party in December 2008.

The 2007 elections remained an active point of contention for years. Opposition parties called for the reallocation of seats, revision of the electoral law, and formal designation of a leader of opposition. The Christian Council of Lesotho (CCL) began mediating the conflict in 2009. Little progress was made until early 2011. In a major breakthrough, the CCL, with the assistance of an expert facilitated by the UN Development Program (UNDP), held a meeting in which all parties agreed on the amendments to be made to the proposed electoral bill. All parties also agreed to use a single-ballot system in future elections, eliminating the possibility of the contentious informal alliances of 2007. The next general elections are scheduled for February or March 2012.

On April 22, 2009, a failed assassination attempt was made on Prime Minister Mosisili at his residence. Two suspects were arrested in Lesotho, and seven suspects were arrested in South Africa. Those seven were handed over to Lesotho authorities on April 19, 2011, following a prolonged extradition process. The suspected mastermind and financier of the attempted coup is in South Africa awaiting his extradition process. Another chief suspect of the investigation, former bodyguard of opposition leader Tom Thabane, Makotoko Lerotholi, died in South Africa on October 16, 2009, before the completion of the extradition process. The suspects are facing charges of attempted murder, robbery, kidnapping, illegal possession of firearms, contravention of the Internal Security Act of Lesotho, and conspiracy to kill the Prime Minister.

GOVERNMENT AND POLITICAL CONDITIONS
The Lesotho Government is a constitutional monarchy. The Prime Minister, Pakalitha Mosisili, is head of government and has executive authority. The King serves a largely ceremonial function; he does not actively participate in political initiatives.

The Lesotho Congress for Democracy (LCD) controls a majority in the National Assembly (the lower house of parliament), with All Basotho Convention (ABC), the National Independent Party, and the Lesotho Workers Party among the 11 opposition parties represented. The upper house of parliament, called the Senate, is composed of 22 principal chiefs whose membership is hereditary, and 11 appointees of the King, acting on the advice of the Prime Minister.

The constitution provides for an independent judicial system. The judiciary is made up of the Court of Appeal, the High Court, Magistrate's Courts, and traditional courts that exist predominately in rural areas. All but one of the Justices on the Court of Appeal are South African jurists. There is no trial by jury; rather, judges make rulings alone, or, in the case of criminal trials, with two other judges as observers. The constitution also protects basic civil liberties, including freedom of speech, association, and the press; freedom of peaceful assembly; and freedom of religion.

For administrative purposes, Lesotho is divided into 10 districts, each headed by a district administrator.

Lesotho held its first post-independence local government elections in 2005 using a quota system that reserved one-third of electoral divisions for women candidates. In these elections, 53% of the victorious candidates were women. Locally elected officials attended post-election training while regulations for local governance were drawn up by the National Assembly and infrastructure was created. Originally scheduled for May 2010, the next local government elections are set for September 2011. A dispute between the LCD and opposition parties over the method of allocating one-third of seats for women led to repeated delays.

Principal Government Officials
Head of State--King Letsie III

Cabinet
Prime Minister--Pakalitha Mosisili
Deputy Prime Minister and Minister of Home Affairs and Public Safety and of Parliamentary Affairs--Archibald Lesao Lehohla
Minister of Defense--Pakalitha Mosisili (also Prime Minister)
Minister of Foreign Affairs and International Relations--Mohlabi Kenneth Tsekoa
Minister of Education and Training--Mamphono Khaketla
Minister of Natural Resources--Monyane Moleleki
Minister of Local Government and Chieftainship Affairs--Pontso Sekatle
Minister of Justice, Human Rights and Correctional Services, and of Law and Constitutional Affairs--Mpeo Mahase-Moiloa
Minister of Finance and Development Planning--Timothy Thahane
Minister of Tourism, Environment, and Culture--Mannete Ramaili
Minister of Public Service--Semano Sekatle
Minister of Trade and Industry, Cooperatives and Marketing--Leketekete Ketso
Minister of Communications, Science, and Technology--Mothetjoa Metsing
Minister of Health and Social Welfare--Mphu Ramatlapeng
Minister of Employment and Labor--'Maphoka Motoboli
Minister of Agriculture and Food Security--Lincoln Ralechate 'Mokose
Minister of Gender, Youth, Sports, and Recreation--Mathabiso Lepono
Minister in the Prime Minister's Office--Motloheloa Phooko
Minister of Public Works and Transportation--Ts'ele Chakela
Minister of Forestry and Land Reclamation--Kabelo Mafura
Assistant Minister of Trade and Industry, Cooperatives, and Marketing--Khotso Matla
Assistant Minister of Education and Training--'Matanki Mokhabi
Assistant Minister of Agriculture and Food Security--Ramootsi Mokone Lehata
Assistant Minister of Home Affairs and Public Safety and of Parliamentary Affairs--Lineo Irene Molise

Ambassador to the United States--David Mohlomi Rantekoa
Permanent Representative and Ambassador to the United Nations--Motlatsi Ramafole

Lesotho maintains an embassy in the United States at 2511 Massachusetts Avenue NW, Washington, DC 20008 (tel: 202-797-5533). Lesotho's mission to the United Nations is located at 204 East 39th Street, New York, NY 10016 (tel: 212-661-1690).

ECONOMY
Lesotho's economy is based on water and electricity sold to South Africa, manufacturing, earnings from the Southern African Customs Union (SACU), agriculture, livestock, and to some extent, earnings of laborers employed in South Africa. Lesotho also exports diamonds, wool, and mohair. Lesotho is geographically surrounded by South Africa and economically integrated with it as well. The western lowlands form the main agricultural zone. The majority of households subsist on farming or migrant labor, and almost 50% of the population earns some income through crop cultivation or animal husbandry. In 2010, agriculture accounted for an estimated 7.1% of GDP.

Water is Lesotho's only significant natural resource. It is being exploited through the 30-year, multi-billion-dollar Lesotho Highlands Water Project (LHWP), which was initiated in 1986. The LHWP is designed to capture, store, and transfer water from the Orange River system and send it to South Africa's Free State Province and greater Johannesburg area, which features a large concentration of South African industry, population, and agriculture. Completion of the first phase of the project has made Lesotho almost completely self-sufficient in the production of electricity and generated approximately $24 million annually from the sale of electricity and water to South Africa. The World Bank, African Development Bank, European Investment Bank, and many other bilateral donors financed the project. Lesotho has taken advantage of the African Growth and Opportunity Act (AGOA) to become the largest exporter of garments to the U.S. from sub-Saharan Africa. Exports totaled $437 million in 2007, and the sector employs approximately 35,000 workers. Taiwanese and Indian investors own most factories.

Lesotho has received economic aid from a variety of sources, including the United States, the World Bank, Ireland, the United Kingdom, the European Union, Germany, and the People's Republic of China.

Lesotho has nearly 7,000 kilometers of unpaved and modern all-weather roads. There is a short rail line (freight) linking the capital city of Maseru with Bloemfontein, South Africa that is owned and operated by South Africa (the half-mile trunk inside Lesotho is operated by Lesotho Flour Mills, Ltd.). Lesotho is a member of the Southern African Customs Union (SACU) in which tariffs have been eliminated on the trade of goods with other member countries, which include Botswana, Namibia, South Africa, and Swaziland. With the exception of Botswana, these countries also form a common currency and exchange control area known as the Common Monetary Area (CMA). The South African rand can be used interchangeably with the loti, the Lesotho currency (plural: maloti). One hundred lisente equal one loti. The loti is at par with the rand.

HIV/AIDS
According to recent estimates, the HIV/AIDS prevalence rate in Lesotho is about 23.2%, the third-highest rate in the world. As of 2002, the United Nations had estimated that the rate would rise to 36% within the next 15 years, resulting in a drop in life expectancy. According to the Lesotho Bureau of Statistics, in 2001 life expectancy was estimated at 48 for men and 56 for women. Recent statistics estimate that life expectancy averages 51.63 years.

In 1999, the government finalized its National Strategic Plan on HIV/AIDS, a diagram for addressing the education, prevention, counseling, and treatment needs of the populace. In 2000, Lesotho declared a national emergency as a result of the HIV/AIDS crisis. In 2003 the Government of Lesotho hosted a SADC Extraordinary Summit on HIV/AIDS. In 2005 legislation was passed to create the National AIDS Commission to coordinate society-wide anti-AIDS activities, which was followed by the launching of a national "Know Your Status" campaign aimed at achieving 100% testing and counseling of all Basotho. A partnership framework that is aligned with the National Strategic Plan was signed in August 2009 by the U.S. President's Emergency Plan for AIDS Relief (PEPFAR) and the Government of Lesotho.

The donor community is collaborating with the Government of Lesotho in a massive effort to address the HIV epidemic. Key international stakeholders include PEPFAR, UN agencies, Irish AID, other international donors, and dozens of non-governmental organizations.

DEFENSE
The security force is composed of the Lesotho Defense Force (LDF--estimated 5,000 personnel) and the Lesotho Mounted Police Service (LMPS--estimated 3,000-4,000 personnel). The LDF consists of an army and an air wing. The LDF reports to the Prime Minister (who is the Minister of Defense and National Security), while the Lesotho Mounted Police Service reports to the Minister of Home Affairs. There also is a National Security Service (NSS) for intelligence, which is directly accountable to the Prime Minister. Relations between the police and the army have occasionally been tense, and in 1997 the army was called upon to put down a serious police mutiny. The situation was defused, relations have since normalized, and the two institutions cooperate as necessary.

FOREIGN RELATIONS
Lesotho's geographic location makes it extremely vulnerable to political and economic developments in South Africa. It is a member of many regional economic organizations including the Southern African Development Community (SADC) and the Southern African Customs Union (SACU). Lesotho also is active in the United Nations, the African Union, the Nonaligned Movement, the Commonwealth, and many other international organizations. In addition to the United States, South Africa, China, Libya, Ireland, and the European Union all currently retain resident diplomatic missions in Lesotho. The United Nations is represented by a resident mission as well, including UNDP, UNICEF, WHO, FAO, WFP, and UNAIDS.

Lesotho has historically maintained generally close ties with the United States, European Union member states, and other Western countries. Although Lesotho decided in 1990 to break relations with the People's Republic of China (P.R.C.) and reestablish relations with Taiwan, in 1993 the nation restored ties with the P.R.C. Lesotho also recognizes Palestine as a state, was a strong public supporter of the end of apartheid in South Africa, and granted a number of South African refugees political asylum during the apartheid era.

U.S.-LESOTHO RELATIONS
The United States was one of the first four countries to establish an embassy in Maseru after Lesotho gained its independence from Great Britain in 1966. Since that time, Lesotho and the United States have consistently maintained productive bilateral relations. In 1996, the United States closed its resident bilateral aid program in Lesotho. In 2007, however, the Government of Lesotho signed a compact with the Millennium Challenge Corporation to provide $362.5 million in support over the next 5 years to develop Lesotho's water, healthcare infrastructure, and private sector. An in-country program to support PEPFAR was established in 2005 and also includes representatives of the U.S. Agency for International Development (USAID) and the Centers for Disease Control. The Peace Corps has operated in Lesotho since 1966. About 60 Peace Corps volunteers concentrate in the sectors of health, agriculture, education, rural community development, and the environment. The Government of Lesotho encourages greater American participation in commercial life and welcomes interest from potential U.S. investors and suppliers.

Principal U.S. Officials
Ambassador--Michele Thoren Bond
Deputy Chief of Mission--Elizabeth Power
Management Officer--Michael Warren
Consular Officer--Karla Brown
Economic and Political Officer--Alexander Sharp
Public Diplomacy Officer--Nina Lewis
General Services Officer--Robert Melvin
Information Management Officer--Ray Jarman
Regional Security Officer--Justin Smith
Director, Peace Corps--Kathy Jacquart-Dill
Resident Country Director, MCC--Gene McDonald
Country Director, CDC--James Creighton
Country Director, USAID--Macarena Garcia
Resident Advisor, U.S. Treasury--Sheryl Kelly

The mailing address of the U.S. Embassy is P.O. Box 333, Maseru 100, Lesotho. Tel: (266) 22-312-666; fax: (266) 22-310-116. E-mail: infomaseru@state.gov.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Kenya

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April 27, 2011Bureau of African Affairs

Background Note: Kenya



Official Name: Republic of Kenya



PROFILE

Geography
Area: 580,367 sq. km. (224,080 sq mi.); slightly smaller than Texas.
Cities: Capital--Nairobi (pop. 2.9 million; 2007 est.). Other cities--Mombasa (828,500; 2006 est.), Kisumu (650,846; 2005-6), Nakuru (1.3 million; 2005-6), Eldoret (193,830; 1999).
Terrain: Kenya rises from a low coastal plain on the Indian Ocean in a series of mountain ridges and plateaus which stand above 3,000 meters (9,000 ft.) in the center of the country. The Rift Valley bisects the country above Nairobi, opening up to a broad arid plain in the north. Highlands cover the south before descending to the shores of Lake Victoria in the west.
Climate: Tropical in south, west, and central regions; arid and semi-arid in the north and the northeast.

People
Nationality: Noun and adjective--Kenyan(s).
Population (August 2010 est.): 39 million.
Major ethnic groups: Kikuyu 6.6 million, Luhya 5.3 million, Luo 4 million, Kalenjin 5 million, Kamba 3.9 million, Kisii 2.2 million, Mijikenda 1.9 million.
Religions: Christian 82.6%, Muslim 11.2%, traditional African religions 5%, Hindu/Sikh/Baha'i/Jewish 1%.
Languages: English (official), Swahili (national), over 40 other languages from the Bantu, Nilotic, and Cushitic linguistic groups.
Education: First 8 years of primary school are provided tuition-free by the government. In January 2008, the government began offering a program of free secondary education, subject to some restrictions. Attendance--92% for primary grades. Adult literacy rate--74%.
Health: Infant mortality rate--57.4/1,000. Life expectancy--55.3 yrs (2007 est.).

Government
Type: Republic.
Independence: December 12, 1963.
Constitution: 1963.
Branches: Executive--president (chief of state, commander in chief of armed forces), prime minister (head of government), and two deputy prime ministers. Legislative--unicameral National Assembly (parliament). Judicial--Court of Appeal, High Court, various lower and special courts, including Kadhi (Sharia) courts.
Administrative subdivisions: 140 districts, joined to form 7 rural provinces. The Nairobi area has special provincial status. The government has gazetted 37 new districts. Under the new constitution, which was approved in a referendum on August 4, 2010, and is in the process of being implemented, the primary administrative subdivisions will be 47 counties, each with an elected governor.
Political parties: Over 40 registered political parties. Two coalitions, the Party of National Unity (PNU) and the Orange Democratic Movement (ODM), dominate the political party scene. PNU membership is filled by parties representing Kikuyu and closely related ethnic groups; ODM membership ranks are filled by parties representing nearly everybody else. PNU and ODM agreed in February 2008 to form a grand coalition government in a power-sharing arrangement that ended the political crisis erupting after disputed national elections in December 2007.
Suffrage: Universal at 18.

Economy
GDP (2010 est.): $32 billion.
Annual growth rate (2010): 5.4%.
Gross national income per capita (2008, Atlas Method): $770.
Natural resources: Wildlife, soda ash, land.
Agriculture: Products--tea, coffee, sugarcane, horticultural products, corn, wheat, rice, sisal, pineapples, pyrethrum, dairy products, meat and meat products, hides, skins. Arable land--17%.
Industry: Types--petroleum products, grain and sugar milling, cement, beer, soft drinks, textiles, vehicle assembly, paper and light manufacturing.
Structure of economy (% of GDP): Services--59.5%; industry and commerce--16.7%; agriculture--23.8%.
Work force: Formal sector wage earners--1.95 million (public sector 30%; private sector 70%). Informal sector workers--6.4 million.
Trade (FY 2010): Exports--$4.96 billion: tea, horticultural products, coffee, petroleum products, cement, pyrethrum, soda ash, sisal, hides and skins, fluorspar. Major export markets--Uganda, United Kingdom, Tanzania, Netherlands, United States, Pakistan. Imports--$11.6 billion: machinery, vehicles, crude petroleum, iron and steel, resins and plastic materials, refined petroleum products, pharmaceuticals, paper and paper products, fertilizers, wheat. Major suppliers--United Arab Emirates, China, India, South Africa, Japan, United States.

PEOPLE
Kenya has a very diverse population that includes three of Africa's major sociolinguistic groups: Bantu (67%), Nilotic (30%), and Cushitic (3%). Kenyans are deeply religious. About 80% of Kenyans are Christian, 11% Muslim, and the remainder follow traditional African religions or other faiths. Most city residents retain links with their rural, extended families and leave the city periodically to help work on the family farm. About 75% of the work force is engaged in agriculture, mainly as subsistence farmers. The national motto of Kenya is Harambee, meaning "pull together." In that spirit, volunteers in hundreds of communities build schools, clinics, and other facilities each year and collect funds to send students abroad.

Kenya has six full-pledged public universities: University of Nairobi, Jomo Kenyatta University of Agriculture and Technology, Egerton University, Moi University, Maseno University, Masinde Muliro University (most of these universities also have constituent colleges); and approximately 13 private universities, including United States International University. Public and private universities have a total enrollment of approximately 50,000 students with about 80% of these being enrolled in public universities (representing 25% of students who qualify for university admission). In addition, more than 60,000 students enroll in middle-level colleges where they study career courses leading to certificate, diploma, and higher diploma awards. International universities and colleges have also established campuses in Kenya where students enroll for distance learning and other flexible programs. Other Kenyan students pursue their university education abroad. More than 5,000 Kenyans are studying in the United States.

HISTORY
Fossils found in East Africa suggest that protohumans roamed the area more than 20 million years ago. Recent finds near Kenya's Lake Turkana indicate that hominids lived in the area 2.6 million years ago.

Cushitic-speaking people from what is now Sudan and Ethiopia moved into the area that is now Kenya beginning around 2000 BC. Arab traders began frequenting the Kenya coast around the first century AD. Kenya's proximity to the Arabian Peninsula invited colonization, and Arab and Persian settlements sprouted along the coast by the eighth century. During the first millennium AD, Nilotic and Bantu peoples moved into the region, and the latter now comprise two thirds of Kenya's population. Swahili, a Bantu language with significant Arabic vocabulary, developed as a trade language for the region.

Arab dominance on the coast was interrupted for about 150 years following the arrival of the Portuguese in 1498. British exploration of East Africa in the mid-1800s eventually led to the establishment of Britain's East African Protectorate in 1895. The Protectorate promoted settlement of the fertile central highlands by Europeans, dispossessing the Kikuyu and others of their land. Some fertile and well watered parts of the Rift Valley inhabited by the Maasai and the western highlands inhabited by the Kalenjin were also handed over to European settlers. For other Kenyan communities, the British presence was slight, especially in the arid northern half of the country. The settlers were allowed a voice in government even before Kenya was officially made a British colony in 1920, but Africans were prohibited from direct political participation until 1944 when a few appointed (but not elected) African representatives were permitted to sit in the legislature.

From 1952 to 1959, Kenya was under a state of emergency arising from the "Mau Mau" insurgency against British colonial rule in general and its land policies in particular. This rebellion took place almost exclusively in the highlands of central Kenya among the Kikuyu people. Tens of thousands of Kikuyu died in the fighting or in the detention camps and restricted villages. British losses were about 650. During this period, African participation in the political process increased rapidly.

The first direct elections for Africans to the Legislative Council took place in 1957. Kenya became independent on December 12, 1963, and the next year joined the Commonwealth. Jomo Kenyatta, an ethnic Kikuyu and head of the Kenya African National Union (KANU), became Kenya's first President. The minority party, Kenya African Democratic Union (KADU), representing a coalition of small ethnic groups that had feared dominance by larger ones, dissolved itself in 1964 and joined KANU.

A small but significant leftist opposition party, the Kenya People's Union (KPU), was formed in 1966, led by Jaramogi Oginga Odinga, a former Vice President and Luo elder. The KPU was banned shortly thereafter, however, and its leader detained. KANU became Kenya's sole political party. At Kenyatta's death in August 1978, Vice President Daniel arap Moi, a Kalenjin from Rift Valley province, became interim President. By October of that year, Moi became President formally after he was elected head of KANU and designated its sole nominee for the presidential election.

In June 1982, the National Assembly amended the constitution, making Kenya officially a one-party state. Two months later, young military officers in league with some opposition elements attempted to overthrow the government in a violent but ultimately unsuccessful coup. In response to street protests and donor pressure, parliament repealed the one-party section of the constitution in December 1991. In 1992, independent Kenya's first multiparty elections were held. Divisions in the opposition contributed to Moi's retention of the presidency in 1992 and again in the 1997 election. Following the 1997 election Kenya experienced its first coalition government as KANU was forced to cobble together a majority by bringing into government a few minor parties.

In October 2002, a coalition of opposition parties formed the National Rainbow Coalition (NARC). In December 2002, the NARC candidate, Mwai Kibaki, was elected the country's third President. President Kibaki received 62% of the vote, and NARC also won 59% of the parliamentary seats. Kibaki, a Kikuyu from Central province, had served as a member of parliament since Kenya's independence in 1963. He served in senior posts in both the Kenyatta and Moi governments, including Vice President and Finance Minister. In 2003, internal conflicts disrupted the NARC government. In 2005 these conflicts came into the open when the government put its draft constitution to a public referendum--key government ministers organized the opposition to the draft constitution, which was defeated soundly. In 2007, two principal leaders of the movement to defeat the draft constitution, Raila Odinga and Kalonzo Musyoka--both former Kibaki allies--were presidential candidates for the Orange Democratic Movement (ODM) party and the Orange Democratic Movement-Kenya (ODM-K) party, respectively. In September 2007, President Kibaki and his allies formed the coalition Party of National Unity (PNU). KANU joined the PNU coalition, although it was serving in parliament as the official opposition party.

On December 27, 2007, Kenya held presidential, parliamentary, and local government elections. While the parliamentary and local government elections were largely credible, the presidential election was seriously flawed, with irregularities in the vote tabulation process as well as turnout in excess of 100% in some constituencies. On December 30, the chairman of the Electoral Commission of Kenya declared incumbent Mwai Kibaki the winner of the presidential election. Violence erupted in different parts of Kenya as supporters of opposition candidate Raila Odinga and supporters of Kibaki clashed with police and each other. The post-election crisis left about 1,300 Kenyans dead and about 500,000 people displaced. In order to resolve the crisis, negotiation teams representing PNU and ODM began talks under the auspices of former UN Secretary General Kofi Annan and the Panel of Eminent African Persons (Benjamin Mkapa of Tanzania and Graca Machel of Mozambique). On February 28, 2008, President Kibaki and Raila Odinga signed a power-sharing agreement, which provided for the establishment of a prime minister position (to be filled by Odinga) and two deputy prime minister positions, as well as the division of an expanded list of cabinet posts according to the parties' proportional representation in parliament. On March 18, 2008, the Kenyan parliament amended the constitution and adopted legislation to give legal force to the agreement. On April 17, 2008 the new coalition cabinet and Prime Minister Odinga were sworn in. The Kofi Annan-led political settlement also set out a reform agenda to address underlying causes of the post-election violence. The focus is on constitutional, electoral, land, and institutional reform as well as increased accountability for corruption and political violence.

GOVERNMENT
The unicameral National Assembly consists of 210 members elected to a term of 5 years from single-member constituencies, plus 12 members nominated by political parties on a proportional representation basis. The president appoints the vice president; under the power-sharing agreement, the president with the agreement of the prime minister makes the initial appointment of cabinet members from among those elected to the assembly. Subsequent cabinet appointments are made by the president in consultation with the prime minister, in accord with the power-sharing agreement's proportional division of cabinet positions. The attorney general and the speaker are ex-officio members of the National Assembly.

The judiciary consists of a Court of Appeal, High Court, and Magistrates’ Courts. The Chief Justice, a member of the Court of Appeal, is the highest-ranking judicial official. Under the new constitution, a Supreme Court will be established.

Local administration is divided among 140 rural districts, each headed by a commissioner appointed by the president. The President has announced additional districts, but these are not yet legally constituted. The districts are joined to form seven rural provinces. Nairobi has special provincial status. The Ministry of State in charge of Provincial Administration and Internal Security supervises the administration of districts and provinces.
Once implemented, the new constitution that was approved on August 4, 2010 will result in significant changes to this structure, including greater devolution of power to 47 counties and creation of a second legislative chamber with responsibility for representing the interests of the counties and regions. Implementation of the new constitution will take several years.

Principal Government Officials
President--Mwai Kibaki
Vice President--Kalonzo Musyoka
Prime Minister--Raila Odinga
Minister of Foreign Affairs--George Saitoti, Acting
Ambassador to the United States--Elkanah Odembo
Permanent Representative to the United Nations--Marcharia Kamau
Consulate General Los Angeles--Wenwa Akinyi Odinga Oranga

Kenya maintains an embassy in the United States at 2249 R Street NW, Washington, DC 20008 (tel. 202-387-6101, website: http://www.kenyaembassy.com) and consulates in Los Angeles and New York.

POLITICAL CONDITIONS
Until post-election political unrest struck in early 2008, Kenya had, since independence, maintained considerable stability despite changes in its political system and crises in neighboring countries. This had been particularly true since the re-emergence of multiparty democracy and the accompanying increase in freedom (including freedom of speech, the press, and assembly).

In December 2002, Kenyans held democratic and open elections, which were judged free and fair by international observers. The 2002 elections marked an important turning point in Kenya's democratic evolution as the presidency and the parliamentary majority passed from the party that had ruled Kenya since independence to a coalition of new political parties. The government lost a referendum over its draft constitution in November 2005. This vote too was widely accepted as free, fair, and credible.

Under the first presidency of Mwai Kibaki, the NARC coalition promised to focus its efforts on generating economic growth, improving and expanding education, combating corruption, and rewriting the constitution. The first two goals were largely met, but progress toward the second two goals was limited. President Kibaki's cabinet from 2002-2005 consisted of members of parliament from allied parties and others recruited from opposition parties who joined the cabinet without the approval of their party leaderships.

In early 2006, revelations from investigative reports of two major government-linked corruption scandals rocked Kenya and led to resignations, including three ministers (one of whom was later reappointed). In March 2006, another major scandal was uncovered involving money laundering and tax evasion in the Kenyan banking system. The government's March 2006 raid on the Standard Group media house conducted by masked Kenyan police was internationally condemned and was met with outrage by Kenya media and civil society. The government did not provide a sufficient explanation. No one has been held accountable.

The December 2007 elections were marred by serious irregularities, and set off a wave of violence throughout Kenya. Following the February 2008 signing of a power-sharing agreement between President Kibaki and the opposition, a new coalition cabinet was sworn in April 2008, headed by Prime Minister Odinga. The 42-member cabinet became the largest in Kenya's history, including new ministries for cooperative development, Northern Kenya development, and Nairobi metropolitan development. Several ministries were also subdivided, creating a number of new cabinet positions.

Constitutional reform that addresses the structure of government to create a more effective system of checks and balances is a key element of the reform agenda agreed as part of the power-sharing agreement. Following the process for producing a new draft constitution that was set out in the December 2008 Constitutional Review Act, Kenyans went to the polls on August 4, 2010 to vote on a new constitution. Reflecting broad support for fundamental change, 66.9% of those who voted endorsed the new constitution. The new constitution retains Kenya's presidential system but introduces additional checks and balances on executive power and greater devolution of power to the sub-national level. Implementing the new constitution will require passage of several dozen pieces of legislation over a 5-year period.

The International Criminal Court has summoned six Kenyans (five high-ranking government officials and one radio executive) to The Hague on charges of crimes against humanity for their alleged roles in the 2007-2008 post-election violence. They appeared at The Hague in April 2011 to be informed of the charges. Confirmation of charges hearings will be held in September 2011, after which the court will make a decision on whether to proceed to trial.

ECONOMY
Kenya is the largest economy in east Africa and is a regional financial and transportation hub. After independence, Kenya promoted rapid economic growth through public investment, encouragement of smallholder agricultural production, and incentives for private (often foreign) industrial investment. Gross domestic product (GDP) grew at an annual average of 6.6% from 1963 to 1973. Agricultural production grew by 4.7% annually during the same period, stimulated by redistributing estates, diffusing new crop strains, and opening new areas to cultivation.

After experiencing moderately high growth rates during the 1960s and 1970s, Kenya's economic performance during the 1980s and 1990s was far below its potential. From 1991 to 1993, Kenya had its worst economic performance since independence. Growth in GDP stagnated, and agricultural production shrank at an annual rate of 3.9%. Inflation reached a record 100% in August 1993. In the mid-1990s, the government implemented economic reform measures to stabilize the economy and restore sustainable growth, including lifting nearly all administrative controls on producer and retail prices, imports, foreign exchange, and grain marketing. Nevertheless, the economy grew by an annual average of only 1.5% between 1997 and 2002, which was below the population growth estimated at 2.5% per annum, leading to a decline in per capita incomes. The poor economic performance was largely due to inappropriate agricultural, land, and industrial policies compounded by poor international terms of trade and governance weaknesses. Increased government intrusion into the private sector and import substitution policies made the manufacturing sector uncompetitive. The policy environment, along with tight import controls and foreign exchange controls, made the domestic environment for investment unattractive for both foreign and domestic investors.

The Kenyan Government's failure to meet commitments related to governance led to a stop-start relationship with the International Monetary Fund (IMF) and World Bank, both of which suspended support in 1997 and again in 2001.

During President Kibaki's first term in office (2003-2007), the Government of Kenya began an ambitious economic reform program and resumed its cooperation with the World Bank and the IMF. There was some movement to reduce corruption in 2003, but the government did not sustain that momentum. Economic growth began to recover in this period, with real GDP growth registering 2.8% in 2003, 4.3% in 2004, 5.8% in 2005, 6.1% in 2006, and 7.0% in 2007. However, the economic effects of the violence that broke out after the December 27, 2007 general election, compounded by drought and the global financial crisis, brought growth down to less than 2% in 2008. In 2009, there was modest improvement with 2.6% growth, while the final 2010 growth figure should be about 5%.

In May 2009, the IMF Board approved a disbursement of approximately $200 million under its Exogenous Shock Facility (ESF), which is designed to provide policy support and financial assistance to low-income countries facing exogenous but temporary shocks. The ESF resources were meant to help Kenya recover from the negative impact of higher food and international fuel and fertilizer costs, and the slowdown in external demand associated with the global financial crisis.

To a considerable extent, the government's ability to stimulate economic demand through fiscal and monetary policy is linked to the pace at which the government is pursuing reforms in other key areas, which remains slow. The Privatization Law was enacted in 2005, but only became operational as of January 1, 2008. Parastatals Kenya Electricity Generating Company (KenGen), Telkom Kenya, and Kenya Re-Insurance have been privatized. The government sold 25% of Safaricom (10 billion shares) in 2008, reducing its share to 35%. Accelerating growth to achieve Kenya's potential and reduce the poverty that afflicts about 46% of its population will require continued deregulation of business, improved delivery of government services, addressing structural reforms, massive investment in new infrastructure (especially roads), reduction of chronic insecurity caused by crime, and improved economic governance generally. The government's Vision 2030 plan calls for these reforms, but realization of the goals could be delayed by coalition politics and line ministries' limited capacity.

Economic expansion is fairly broad-based and is built on a stable macro-environment fostered by government, and the resilience, resourcefulness, and improved confidence of the private sector. Despite the post-election crisis, Nairobi continues to be the primary communication and financial hub of East Africa. It enjoys the region's best transportation linkages, communications infrastructure, and trained personnel, although these advantages are less prominent than in past years.

In FY 2010, tea was Kenya's top export, accounting for $1.15 billion. Fresh horticulture exports were $718 million, well short of the record high of $1.12 billion in 2007, in part due to unfavorable global weather conditions that affected air transportation. The sector is expected to rebound in 2011. Tourism has rebounded from the drop experienced in 2008 after the post-election violence, bringing in $807 million in 2009, an increase of 19% from 2008. In the first 8 months of 2010, arrivals continued to increase, registering 14.5% growth compared to the same period in 2009. Africa is Kenya's largest export market, followed by the European Union (EU). Kenya benefits significantly from the African Growth and Opportunity Act (AGOA), but the apparel industry is struggling to hold its ground against Asian competition. Currently there are 19 apparel factories, 1 yarn/fabric company, and 6 accessory companies (labels, sewing supplies, hangers) operating in the Export Processing Zones. Approximately 90% of Kenya's AGOA exports in 2010 were garments, and Kenya’s garment exports under AGOA totaled $202 million in 2010 (a slight increase over 2009 but still well below the 2006 level of $265 million).

Kenya does not systematically collect foreign direct investment (FDI) statistics, and its historical performance in attracting FDI has been relatively weak. The stock of FDI in 2005 was estimated to be about $1.04 billion, less than half of that in neighboring Tanzania. Net foreign direct investment was negative from 2000-2003, but started trickling back in 2004. The stock of U.S. FDI (at historical prices) was estimated to be about U.S. $180 million as of 2010.

Remittances are Kenya’s single largest source of foreign exchange and a key social safety net. According to the Central Bank of Kenya, recorded remittances totaled about $640 million in 2010; however, the actual number may be as high as $1 billion.

Kenya faces profound environmental challenges brought on by high population growth, deforestation, shifting climate patterns, and the overgrazing of cattle in marginal areas in the north and west of the country. Significant portions of the population will continue to require emergency food assistance in the coming years.

Kenya is pursuing regional economic integration, which could enhance long-term growth prospects. The government is pursuing a strategy to reduce unemployment by expanding its manufacturing base to export more value-added goods to the region while enabling Kenya to develop its services hub. In March 1996, the Presidents of Kenya, Tanzania, and Uganda re-established the East African Community (EAC). The EAC's objectives include harmonizing tariffs and customs regimes, free movement of people, and improving regional infrastructures. In March 2004, the three East African countries signed a Customs Union Agreement paving the way for a common market. The Customs Union and a Common External Tariff were established on January 1, 2005, but the EAC countries are still working out exceptions to the tariff. Rwanda and Burundi joined the community in July 2007. In May 2007, during a Common Market for Eastern and Southern Africa (COMESA) summit, 13 heads of state endorsed a move to adopt a COMESA customs union and set December 8, 2008 as the target date for its adoption. On July 1, 2010, the EAC Common Market Protocol, which allows for the free movement of goods and services across the five member states, took effect. In October 2008, the heads of state of EAC, COMESA, and the Southern African Development Community (SADC) agreed to work toward a free trade area among all three economic groups with the eventual goal of establishing a customs union. If realized, the Tripartite Free Trade area would cover 26 countries.

Media
The key independent print media in Kenya are the Nation Media Group, the Standard Group, People Limited, and the Times Media Group. The Nation Media Group publications, which include the Daily Nation, the Sunday Nation, the Business Daily, the weekly East African, and the only Swahili publications, Taifa Leo and Taifa Jumapili, have the largest circulations. The Standard and the Sunday Standard, published by the Standard Group, are also popular newspapers, although with smaller circulations. Approximately 120 foreign correspondents representing 100 media organizations report from Nairobi. There is no government-owned or controlled newspaper.

Major independent radio and television media are the Kenya Television Network (KTN), the broadcast media arm of the Standard Group; Nation Radio/TV, owned by the Nation Media Group; and Citizen Radio/Television, owned by Royal Media Services. The government owns and controls the Kenya Broadcasting Corporation (KBC) and its subsidiaries. KBC is the only national radio and television network.

Kenya also has hundreds of FM radio stations, some broadcasting in Swahili or in local languages. Radio has a wide reach in Kenya, especially in rural areas. Some major international broadcasters, including British Broadcasting Corporation (BBC), Voice of America (VOA), and Radio France Internationale (RFI), rebroadcast their programming in Kenya.

FOREIGN RELATIONS
Despite internal tensions in Sudan and Ethiopia, Kenya has maintained good relations with its northern neighbors. Relations with Uganda and Tanzania are strengthening as the three countries work for mutual economic benefit.

Kenya has hosted and played an active role in the negotiations to resolve the civil war in Sudan and to reinstate a central government authority in Somalia. On January 9, 2005 a Sudan North-South Comprehensive Peace Accord was signed in Nairobi. Negotiations in the Somali National Reconciliation Conference resulted at the end of 2004 in the establishing of Somali Transitional Federal Institutions (Assembly, President, Prime Minister, and Government). Until early 2005, Kenya served as a major host for these institutions. Between May and June 2005, members of the Somalia Transitional Federal Institutions relocated to Somalia. Kenya is host to more than 450,000 refugees, most of whom are from Somalia with the remainder primarily from Sudan and Ethiopia.

Kenya's relations with Western countries are generally friendly, although current political and economic instabilities are sometimes blamed on Western pressures.

U.S.-KENYAN RELATIONS
The United States and Kenya have enjoyed cordial relations since Kenya's independence. Relations became even closer after Kenya's democratic transition of 2002 and subsequent improvements in civil liberties.

Approximately 15,000 U.S. citizens are registered with the U.S. Embassy as residents of Kenya. More than 100,000 Americans visited Kenya in 2010. About two-thirds of resident Americans are missionaries and their families. U.S. business investment is estimated to be more than $285 million, primarily in commerce, light manufacturing, and the tourism industry.

Al Qaeda terrorists bombed the U.S. Embassy in Nairobi on August 7, 1998, taking hundreds of lives and maiming thousands more. Since that event, the Kenyan and U.S. Governments have intensified cooperation to address all forms of insecurity in Kenya, including terrorism. The United States provides equipment and training to Kenyan security forces, both civilian and military. In its dialogue with the Kenyan Government, the United States urges effective action against corruption and insecurity as the two greatest impediments to Kenya achieving sustained, rapid economic growth.

U.S. assistance to Kenya is substantial. It promotes broad-based economic development as the basis for continued progress in political, social, and related areas of national life. The U.S. assistance strategy is built around five broad objectives: Fighting disease and improving healthcare; fighting poverty and promoting private sector-led prosperity; advancing shared democratic values, human rights, and good governance; cooperating to fight insecurity and terrorism; and collaborating to foster peace and stability in East Africa. The Peace Corps, which usually has about 150 volunteers in Kenya, is integral to the overall U.S. assistance strategy in Kenya.

Principal U.S. Officials
Ambassador--Michael E. Ranneberger (departure May 4, 2011; replacement is Jonathan Scott Gration, arrival May 16, 2011)
Deputy Chief of Mission--Lee Brudvig
USAID Mission Director--Erna Kerst
Consul General--Elizabeth Jordan
Political Counselor--Margot Sullivan
Economic Counselor--Eric Whitaker
Public Affairs Officer--John Haynes

The U.S. Embassy in Kenya is located on UN Avenue, Nairobi, P.O. Box 606, Village Market, Nairobi (tel. 254-20-363-6000; fax 254-20-363-6157).

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Bulgaria

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April 27, 2011Bureau of European and Eurasian Affairs

Background Note: Bulgaria



Official Name: Republic of Bulgaria



PROFILE

Geography
Area: 110,910 sq. km. (slightly larger than Tennessee).
Major cities: Capital--Sofia 1.3 million. Others--Plovdiv 379,493; Varna 352,674.
Terrain: Bulgaria is located in South Central Europe. The terrain is varied, containing large mountainous areas, fertile valleys, plains and a coastline along the Black Sea.
Climate: Continental--mild summers and cold, snowy winters.

People
Population (July 2009 est.): 7,204,687.
Population growth rate (2009 est.): -0.79%.
Ethnic groups (2001): Bulgarian 83.94%, Turkish 9.42%, Roma 4.68%, and other 2% (including Macedonian, Armenian, Tatar).
Religions (2001): Bulgarian Orthodox 82.6%, Muslim 12.2%, Roman Catholic 0.6%, Protestant 0.5%, others.
Language: Bulgarian 84.5%, other 15.5%.
Health: Life expectancy (2009 est.)--male: 69.48 years; female: 76.91 years. Infant mortality rate (2009 est.)--17.87 deaths/1,000 live births.
Work force: 2.67 million (2008 est.). Agriculture--7.5%; industry--35.5%, services--57% (2007 est.).

Government
Type: Parliamentary democracy.
Constitution: Adopted July 12, 1991.
Independence: 1908 (from the Ottoman Empire).
Branches: Executive--president (chief of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--unicameral National Assembly or Narodno Subranie--240 seats. Members are elected through a mixed electoral system for 4-year terms. Judicial--three-tiered system.
Administrative divisions: 28 provinces including the capital region of Sofia.
Suffrage: Universal at 18 years of age.
Political parties: Major political parties--Citizens for the European Development of Bulgaria (GERB); Bulgarian Socialist Party (BSP); Movement for Rights and Freedoms (MRF); Attack Political Party (ATAKA); Blue Coalition (formed by Union of Democratic Forces, Democrats for a Strong Bulgaria, and a few more center-right parties); Order, Law, Justice (RZS). Parties and leaders--ATAKA (Attack Political Party) [Volen SIDEROV]; Agrarian National Union or ANU [Stefan LICHEV]; Blue Coalition (a coalition of center-right parties dominated by UDF and DSB); Bulgarian New Democracy [Nikolay SVINAROV]; Bulgarian Socialist Party or BSP [Sergei STANISHEV]; Citizens for the European Development of Bulgaria or GERB [Tsvetan TSVETANOV (formal); Boyko Borissov (informal)]; Coalition for Bulgaria or CfB (coalition of parties dominated by BSP) [Sergei STANISHEV]; Democrats for a Strong Bulgaria or DSB [Ivan KOSTOV]; Gergyovden [Petar STOYANOVICH]; Internal Macedonian Revolutionary Organization or IMRO [Krasimir KARAKACHANOV]; Liberal Initiative for Democratic European Development or LIDER [Hristo KOVACHKI]; Movement for Rights and Freedoms or MRF [Ahmed DOGAN]; National Movement for Stability and Progress or NDSV [Simeon SAXE-COBURG-GOTHA] (formerly National Movement Simeon II or NMS2); New Time [Emil KOSHLUKOV]; Order, Law, Justice or RZS [Yane YANEV]; Union of Democratic Forces or UDF [Martin DIMITROV]; Union of Free Democrats or UFD [Stefan SOFIYANSKI]; United Agrarians (part of the Blue coalition) [Anastasia MOZER]. Results from the July 5, 2009 general election were as follows (voter turnout 60.20%; percent of vote by party)--GERB 39.72%, BSP 17.70%, MRF 14.45%, ATAKA 9.36%, Blue Coalition 6.76%, RZS 4.13%, other 7.88%. As of September 2009, seat allocation was as follows--GERB 116, BSP 40, MRF 38, ATAKA 21, Blue Coalition 14, RZS 10, independent 1.

Economy
GDP (2009, est.): $48.7 billion.
Real GDP growth: -5.0% (2009 est.); 6% (2008); 6.2% (2007); 6.3% (2006); 6.2% (2005); 6.6% (2004); 4.3% (2003).
Per capita GDP (2009, est.): $6,423.
Inflation rate: 1.6% (2009); 7.2% (2008); 11.6% (2007), 6.1% (2006); 7.4% (2005); 4.0% (2004); 5.6% (2003).
Unemployment rate: 9.1% (2009); 6.3% (2008); 6.9% (2007); 9.1% (2006); 10.7% (2005); 12.2% (2004); 14.3% (2003).
Natural resources: Bauxite, copper, lead, zinc, coal, and timber.
Official exchange rate: Lev per $1 U.S. = 1.36 (2009); 1.39 (2008); 1.33 (2007); 1.49 (2006); 1.66 (2005); 1.44 (2004).

GEOGRAPHY AND PEOPLE
Bulgaria shares a border with Turkey and Greece to the south, Macedonia and Serbia to the west, Romania to the north, and the Black Sea to the east. The capital, Sofia, lies in the western region of the country. Ethnic groups include Bulgarian, Turkish, Roma, and others. The official language is Bulgarian.

HISTORICAL HIGHLIGHTS
Ancient Thrace was partially located on the territory of modern Bulgaria, and Thracian culture provides a wealth of archeological sites within Bulgaria. In the second century A.D., the Bulgars came to Europe from their old homeland, the Kingdom of Balhara situated in the Mount Imeon area (present Hindu Kush in northern Afghanistan).

The first Bulgarian state was established in 635 A.D., located along the north coast of the Black Sea. In 681 A.D. the first Bulgarian state on the territory of modern Bulgaria was founded. This state consisted of a mixture of Slav and Bulgar peoples. In 864, Bulgaria adopted Orthodox Christianity. The First Bulgarian Kingdom, considered to be Bulgaria's "Golden Age," emerged under Tsar Simeon I in 893-927. During this time, Bulgarian art and literature flourished. Followers of Saints Cyril and Methodius are believed to have developed the Cyrillic alphabet in Bulgaria in the early 10th century.

In 1018, the Byzantine Empire conquered Bulgaria. In 1185 the Bulgarians broke free of Byzantine rule and established the Second Bulgarian Kingdom. A number of Bulgaria's famous monasteries were founded during this period. Following the 1242 Mongol invasion, this kingdom began losing territory to its neighbors. Ottoman expansion into the Balkan Peninsula eventually reached Bulgaria, and in 1396 Bulgaria became part of the Ottoman Empire. During the 5 centuries of Ottoman rule, most of Bulgaria's indigenous cultural centers were destroyed. Several Bulgarian uprisings were brutally suppressed and a great many people fled abroad. The April uprising of 1876, the Russo-Turkish War (1877-78), and the Treaty of San Stefano (March 3, 1878, the date of Bulgaria's national holiday), began Bulgaria's liberation from the Ottoman Empire, but complete independence was not recognized until 1908.

During the first half of the 20th century, Bulgaria was marred by social and political unrest. Bulgaria participated in the First and Second Balkan Wars (1912 and 1913) and sided with the Central Powers, and later the Axis Powers, during the two World Wars. Although allied with Germany during World War II, Bulgaria never declared war on the Soviet Union and never sent troops abroad to fight under Nazi command. Near the end of World War II, Bulgaria changed sides to fight the German army all the way to Austria; 30,000 Bulgarian troops were killed.

Bulgaria had a mixed record during World War II, when it was allied with Nazi Germany under a March 1941 agreement. The Law for the Protection of the Nation, enacted in January 1941, divested Jews of property, livelihood, civil rights, and personal security. Despite a February 1943 agreement requiring Bulgaria to transfer Bulgaria's Jews to Nazi extermination camps in Poland, Bulgaria did not actually deport any Bulgarian Jews or Roma to Nazi concentration camps. Under that agreement, however, Bulgarian forces transferred approximately 11,000 Jews from Bulgarian-occupied territory (Thrace and Macedonia) to Nazi concentration camps. In June 1943 the government "re-settled" Sofia's 25,000 Jews to rural areas. Tsar Boris--supported by the parliament (especially its prominent Deputy Speaker, Dimitar Peshev), the Orthodox Church, and the general public--aided the Jewish community and helped its 50,000 members survive the war, despite harsh conditions. The Bulgarian Jews remained safe, and when they were permitted to emigrate to Israel after the war, most of them did.

King Simeon II assumed control of the throne in 1943 at the age of six following the death of his father Boris III. With the entry of Soviet troops into Bulgaria in September 1944 and the defeat of the Axis Powers in World War II, communism emerged as the dominant political force within Bulgaria. Simeon, who later returned and served as Prime Minister, was forced into exile in 1946 and resided primarily in Madrid, Spain. By 1946, Bulgaria had become a satellite of the Soviet Union, remaining so throughout the Cold War period. Todor Zhivkov, the head of the Bulgarian Communist Party, ruled the country for much of this period. During his 27 years as leader of Bulgaria, democratic opposition was crushed; agriculture was collectivized and industry was nationalized; and the Bulgarian Orthodox Church fell under the control of the state.

In 1989, Zhivkov was removed from power, and democratic change began. The first multi-party elections since World War II were held in 1990. The ruling communist party changed its name to the Bulgarian Socialist Party and won the June 1990 elections. Following a period of social unrest and passage of a new constitution, the first fully democratic parliamentary elections were held in 1991 in which the Union of Democratic Forces won. The first direct presidential elections were held the next year.

As Bulgaria emerged from the throes of communism, it experienced a period of social and economic turmoil that culminated in a severe economic and financial crisis in late 1996-early 1997. With the help of the international community, former Prime Minister Ivan Kostov initiated a series of reforms in 1997 that helped stabilize the country's economy and put Bulgaria on the Euro-Atlantic path. Elections in 2001 ushered in a new government and president. In July 2001, Bulgaria's ex-king Simeon Saxe-Coburg-Gotha became the first former monarch in post-communist Eastern Europe to become Prime Minister. His government continued to pursue Euro-Atlantic integration, democratic reform, and development of a market economy. Bulgaria became a member of the North Atlantic Treaty Organization on March 29, 2004, and a member of the European Union (EU) on January 1, 2007.

Following June 2005 general elections, Sergei Stanishev of the Bulgarian Socialist Party became the new Prime Minister of a coalition government on August 16, 2005. In October 2006, Georgi Parvanov, the former leader of the Bulgarian Socialist Party, became the first Bulgarian president to win re-election. Despite his limited constitutional powers, President Parvanov has played an important role in helping to ensure a consistent, pro-Western foreign policy. The Stanishev government continued Bulgaria's integration with the Euro-Atlantic world and its close partnership with the United States. Bulgaria has attracted large amounts of American and European investment, and is an active partner in coalition operations in Afghanistan as well as in UN-led peacekeeping operations in the Balkans.

In the July 2009 general elections, Bulgarian voters punished the Socialist-led government for corruption scandals and frozen EU funds. GERB took 116 of 240 seats in parliament, and its leader (and former Sofia mayor) Boyko Borissov became the Prime Minister. Borissov formed a minority government supported by the Blue Coalition, Ataka, and RZS. The government's priorities include: promoting economic stability, unblocking the frozen EU funds, and fighting corruption. According to the latest opinion polls, Borissov’s government is the most popular government since the beginning of the transition in 1989.

GOVERNMENT AND POLITICAL CONDITIONS
Bulgaria is a parliamentary republic. The unicameral National Assembly, or Narodno Subranie, consists of 240 deputies who are elected for 4-year terms through a mixed electoral system: 209 members of parliament (MPs) elected according to the classic proportional representation system (voters vote for fixed, rank-ordered party lists for each of the 31 electoral districts, with a different list for each district), and 31 majority MPs elected individually under the majority representation system in each and every district (the winning candidate receives a plurality of the votes in the region). Parliament selects and dismisses government ministers, including the prime minister, exercises control over the government, and sanctions deployment of troops abroad. It is responsible for enactment of laws, approval of the budget, scheduling of presidential elections, declaration of war, and ratification of international treaties and agreements.

A 1-month official campaign period precedes general elections. The voting age is 18. Preliminary results are available within hours of poll closings. Parties and coalitions must win a minimum 4% of the national vote to enter parliament. Seats are then allocated to the parties in proportion to the distribution of votes in their respective electoral districts. Votes belonging to parties not passing the 4% threshold are distributed to other parties using the method of the smallest remainder. The lists of newly elected members of parliament are announced 7 days after the elections. The president must convene the new parliament within 1 month after the elections, and calls upon parties, coalitions, or political groups to nominate a prime minister and form a government. If the three largest parties, coalitions, or political groups fail to nominate a prime minister, the president can dissolve parliament and schedule new elections. In recent years, it has taken approximately a month for the new government to form.

A general election was held in Bulgaria July 5, 2009; turnout was 60.20%. Results were as follows: GERB 39.7%, BSP 17.7%, MRF 14.4%, ATAKA 9.4%, Blue Coalition 6.8%, RZS 4.1%, other 7.9%; seats by party were GERB 116, BSP 40, MRF 38, ATAKA 21, Blue Coalition 15, RZS 10.

Results of the June 7, 2009 European Parliament elections were GERB 24.36%, 5 seats; BSP 18.5%, 4 seats; DPS 14.14%, 3 seats; ATAKA 11.96%, 2 seats; NDSV 7.96%, 2 seats; Blue Coalition (SDS-DSB and other right-wing parties) 7.95%, 1 seat (turnout: 37.49%).

The president of Bulgaria is directly elected for a 5-year term with the right to one re-election. The president serves as the head of state and commander in chief of the armed forces. The president is the head of the Consultative Council for National Security and while unable to initiate legislation, the president can return a bill for further debate. Parliament can overturn the president's veto with a simple majority vote. Bulgarian Socialist Party candidate Georgi Parvanov won the November 2001 presidential election and was re-elected in October 2006 as an independent candidate in a run-off against Volen Siderov, the leader of extreme nationalist Ataka Party. The next presidential election will be held in Fall 2011.

The prime minister is head of the Council of Ministers, which is the primary component of the executive branch. In addition to the prime minister and deputy prime ministers, the Council is composed of ministers who head the various agencies within the government and usually come from the majority/ruling party or from a member party of the ruling coalition in parliament. The Council is responsible for carrying out state policy, managing the state budget and maintaining law and order. The Council must resign if the National Assembly passes a vote of no confidence in the Council or prime minister.

The Bulgarian judicial system became an independent branch of the government following passage of the 1991 constitution. Reform within this branch has been slow, with political influence, widespread corruption, and long delays continuously plaguing the system. In 1994, the National Assembly passed the Judicial System Act to further delineate the role of the judiciary. In 2003, Bulgaria adopted amendments to the constitution, which aimed to improve the effectiveness of the judicial system by limiting magistrates' irremovability and immunity against criminal prosecution. Additional amendments to the constitution in 2006 and 2007 further increased oversight of the judicial system by the legislative branch. They introduced the Supreme Judicial Council as a permanently operating supervisory body, as well as an Inspectorate responsible for overseeing the performance of the judicial system as a whole and its individual members. The prosecution service was given absolute authority over all investigations, and the police received a mandate to investigate 95% of all crimes, which reduced the role of the investigative service.

The trial, appellate, and cassation (highest appellate) courts comprise the three tiers of the judicial system. Military courts (at trial and appeal level) handle cases involving military and Ministry of Interior personnel. Administrative courts, effective since March 2007, specialize in reviewing appeals of government acts.

The Supreme Administrative Court and the Supreme Court of Cassation are the highest courts of appeal and determine the application of all laws.

The Supreme Judicial Council (SJC) is composed of 25 members serving 5-year terms. Those who serve on the council are experienced legal professionals and are either appointed by the National Assembly, selected by the judicial system, or serve on the SJC as a result of their position in government. The SJC manages the judiciary and is responsible for appointing judges. In 2007 parliament revised the Judicial System Act to make it compliant with the latest constitutional amendments, which provided for the establishment of the Inspectorate with the Supreme Judicial Council: a standing body with 11 members who investigate complaints of magistrates' misconduct, with no right to rule on the substance of judicial acts.

The Constitutional Court, which is separate from the rest of the judiciary, interprets the constitution and constitutionality of laws and treaties. Its 12 justices serve 9-year terms and are selected by the president, the National Assembly, and the Supreme Courts.

Principal Government Officials
President--Georgi Parvanov
Prime Minister--Boyko Borissov
Deputy Prime Minister/Minister of Finance--Simeon Dyankov
Deputy Prime Minister/Minister of Interior--Tsvetan Tsvetanov
Minister of Foreign Affairs--Nickolay Mladenov
Minister of Defense--Anyu Angelov
Minister of Economy, Energy, and Tourism--Traicho Traikov
Bulgaria's Commissioner to the EU--Kristalina Georgieva, Commissioner for International Cooperation, Humanitarian Aid, and Crisis Response

Bulgaria maintains an embassy in the United States at 1621 22nd Street, NW, Washington DC 20008 (tel. 202-387-0174; fax: 202-234-7973).

ECONOMY
Bulgaria's economy contracted dramatically after 1989 with the collapse of the COMECON system and the loss of the Soviet market, to which the Bulgarian economy had been closely tied. The standard of living fell by about 40%. In addition, UN sanctions against Yugoslavia and Iraq took a heavy toll on the Bulgarian economy. The first signs of recovery emerged when GDP grew in 1994 for the first time since 1988, by 1.4% and then by 2.5% in 1995. Inflation, which surged in 1994 to 122%, fell to 32.9% in 1995. During 1996, however, the economy collapsed due to shortsighted economic reforms and an unstable and de-capitalized banking system.

Under the leadership of former Prime Minister Ivan Kostov (UDF), who came to power in 1997, an ambitious set of reforms was launched, including introduction of a currency board regime, bringing growth and stability to the Bulgarian economy. The currency board contained inflationary pressures and the three-digit inflation in 1997 was cut to only 1% in 1998. Following declines in GDP in both 1996 and 1997, the Bulgarian Government delivered strong, steady GDP growth in real terms in recent years. Prime Minister Simeon Saxe-Coburg's economic team of young, Western-educated financiers continued to implement measures that helped sustain stable economic growth and curb unemployment. Measures introduced by the government were targeted at reducing corporate and individual taxes, curtailing corruption, and attracting foreign investment. The government also restructured the country's foreign debt, revived the local stock market, and moved ahead with long-delayed privatization of some major state monopolies. As a result of this progress, in October 2002 the European Commission declared Bulgaria had a "Functioning Market Economy."

Successive governments continued these reforms, and in 2007 the country joined the European Union. According to the World Bank, in 2006 Bulgaria attracted the highest levels of foreign direct investment, as a share of GDP, among Eastern European countries. In early 2007, to attract additional foreign investment, the Bulgarian Government lowered corporate tax rates to 10%, reportedly the lowest rate in Europe. A flat-tax rate of 10% for personal income, in place as of January 1, 2008, has helped to bring down domestic labor costs and reduce the share of the "gray" economy. In response to local governments' demand for financial independence in 2006, parliament passed fiscal decentralization of municipalities, granting them authority over collection and administration of some taxes, thus further enhancing local economic stability. The 2007-2009 global financial and economic crisis erased many of the gains attributed to conservative fiscal policies and tax reforms. After 10 years of steady growth, Bulgaria's economy fell into recession in the fourth quarter of 2008, causing an increase in both unemployment and household debt. The new government responded with an 82-point "anti-crisis" plan to maintain fiscal stability and promote economic recovery. The government also committed itself to strengthening control over EU funds and fighting organized crime and corruption.

DEFENSE
Bulgaria became a member of NATO on March 29, 2004. Bulgaria's military is currently undergoing an ambitious restructuring program which aims to bring the army up to NATO standards, modernize equipment, and bring about full integration of the civilian and armed components. In 2008, Bulgaria made the transition to an all-volunteer force. Since 1994, the U.S. Government has provided approximately $134 million in foreign military financing assistance to support training and procurement of military equipment.

As of June 2010, Bulgaria had approximately 755 troops serving abroad in support of NATO, EU, and UN missions. It currently has company-sized units working with coalition forces in Afghanistan and has maintained small contingents of troops deployed with international forces in Bosnia and Herzegovina and Kosovo. It deployed a frigate to Lebanon with UNIFIL in late 2006 and has several military observers serving in support of United Nations missions in Ethiopia, Liberia, and Kosovo.

There are three Bulgarian bases identified as “joint-use facilities” (meaning the U.S. has the right to station troops and conduct training in them) in the U.S.-Bulgarian Defense Cooperation Agreement (DCA) signed April 28, 2006 by Secretary of State Condoleezza Rice: Novo Selo Training Area (including the Aytos Storage Facility), Bezmer Air Base, and Graf Ignatievo Air Base.

FOREIGN RELATIONS
Bulgaria became a member of the North Atlantic Treaty Organization on March 29, 2004, and a member of the European Union on January 1, 2007. Bulgaria is a member of the United Nations, and in 2002-2003 served a 2-year term as a nonpermanent member on the UN Security Council. Bulgaria served as Chair-In-Office of the Organization for Security and Cooperation in Europe (OSCE) in 2004.

Bulgaria joined the World Trade Organization in 1996. In July 1998, Bulgaria became a full member of the Central European Free Trade Agreement (CEFTA), which called for the reduction of tariffs by 2002 on most industrial and agricultural goods traded between CEFTA countries. Bulgaria has initialed free trade agreements with Turkey, Macedonia, Croatia, Lithuania, Estonia, Israel, Albania, and Latvia.

On September 22, 2009, UNESCO’s Executive Board nominated Bulgarian diplomat Irina Bokova to become its next Director General; she took office in November 2009.

Bulgaria's relationship with its neighbors has generally been good. Bulgaria has proven to be a constructive force in the region and has played an important role in promoting regional security. Pursuing its initiative as a partner in the South-East European regional cooperation, Bulgaria held the chairmanship-in-office of the South-East European Cooperation Process (SEECP) for the period May 2007-May 2008.

U.S.-BULGARIAN RELATIONS
The year 2003 marked the 100th anniversary of diplomatic relations between the United States and Bulgaria. U.S.-Bulgarian relations were severed in 1950 but were restored a decade later. Bilateral relations between the two nations improved dramatically after the fall of communism. The United States moved quickly to encourage development of multi-party democracy and a market economy. The U.S. signed a Bilateral Investment Treaty in 1994 and gave Bulgaria most-favored-nation trade status in October 1996.

In 1989, the U.S. Congress passed the Support for East European Democracies Act (SEED), authorizing financial support to facilitate development of democratic institutions, political pluralism, and free market economies in the Balkan region. Since 1990, Bulgaria has received over $600 million in SEED assistance. In 2007, after its EU accession, Bulgaria graduated from the SEED program.

In May 2005 the United States and the Republic of Bulgaria signed a Defense Cooperation Agreement, which gives the United States military access to and shared use of several Bulgarian military facilities. The United States military intends to use this access to facilitate joint training with the Bulgarian and Romanian militaries. In January 2009 a treaty on avoidance of double taxation came into effect.

American citizens traveling on a U.S. passport for business or tourism purposes can enter and stay in Bulgaria for up to 90 days in a 6-month period without requiring issuance of a visa.

Bulgaria hosts the only fully American university in the region, the American University of Bulgaria in Blagoevgrad, established in 1991, drawing students from throughout southeast Europe and beyond. As of 2007, the American University of Bulgaria had over 1,000 students.

In June 2007, President George W. Bush visited Sofia following the first visit of a U.S. President, Bill Clinton, in 1999.

Principal U.S. Official
Ambassador--James B. Warlick, Jr.
Deputy Chief of Mission--Susan Sutton
Political-Economic Counselor--Rebecca Dunham
Legal Attache--Timothy Langan, Jr.
Public Affairs Counselor--Kenneth Moskowitz
Management Counselor--Andrew Siegel
Regional Security Officer--Thomas Huey
Defense Attache--Col. David Wilcot
Office of Defense Cooperation--Ltc Mark Imblum
Commercial Counselor--Scott Pozil
Agriculture Counselor--Hoa Huynh
Consul General--Eric Alexander

The U.S. Embassy is located at 16 Kozyak Street, Sofia; tel: [359] (2) 937-5100; facsimile: [359] (2) 9375-320.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Vietnam

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November 30, 2010Bureau of East Asian and Pacific Affairs

Background Note: Vietnam



Official Name: Socialist Republic of Vietnam



PROFILE

Geography
Area: 331,114 sq. km. (127,243 sq. mi.); equivalent in size to Ohio, Kentucky, and Tennessee combined.
Cities (2009): Capital--Hanoi (pop. 6.472 million). Other cities--Ho Chi Minh City (formerly Saigon; pop. 7.163 million), Haiphong (pop. 1.841 million), Danang (pop. 890,500), Can Tho (pop. 1.189 million).
Terrain: Varies from mountainous to coastal delta.
Climate: Tropical monsoon.

People
Nationality: Noun and adjective--Vietnamese (sing. and pl.).
Population (2009): 85.847 million.
Annual population growth rate (2009): 1.2%.
Ethnic groups (2009): 54 groups including Vietnamese (Kinh) (73.594 million, or 85.7% of the population), Tay (1.89%), Thai (1.8%), Muong (1.47%), Khmer (1.46%), Chinese (0.95%), Nung (1.12%), Hmong (1.24%).
Religions (2008): Buddhism (approx. 50%), Catholicism (8%-10%), Cao Dai (1.5%-3%), Protestantism (0.5%-2%), Hoa Hao (1.5%-4%), Islam (0.1%), and other animist religions.
Languages: Vietnamese (official), English (increasingly favored as a second language), some French, Chinese, and other ethnic minority languages.
Education (2009): Literacy--94%.
Health (2009): Birth rate--17.73 births/1,000 population. Infant mortality rate--22.26 deaths/1,000 live births. Life expectancy--73 yrs. Death rate--5.98/1,000 population.

Government
Type: Single-party constitutional republic (Communist Party).
Independence: September 2, 1945.
New constitution: April 15, 1992.
Branches: Executive--president (head of state and chair of National Defense and Security Council) and prime minister (heads cabinet of ministries and commissions). Legislative--National Assembly. Judicial--Supreme People's Court; Prosecutorial Supreme People's Procuracy.
Administrative subdivisions: 58 provinces, 5 municipalities (Can Tho, Haiphong, Danang, Hanoi, Ho Chi Minh City).
Political party: Communist Party of Vietnam (CPV) with over 3 million members, formerly (1951-76) Vietnam Worker's Party, itself the successor of the Indochinese Communist Party founded in 1930.
Suffrage: Universal over 18.

Economy
GDP: $92.6 billion (2009); $70 billion (through third quarter 2010).
Real growth rate: 5.32% (2009); 6.52% (through third quarter 2010, year-on-year).
Per capita income (2009): $1,052.
Inflation rate: 6.88% (average monthly Consumer Price Index of 2009, year-on-year); 8.64% (average monthly CPI through third quarter 2010, year-on-year).
External debt (2009): 32.8% of GDP, $30.1 billion.
Natural resources: Coal, crude oil, zinc, copper, silver, gold, manganese, iron.
Agriculture, forestry, and fisheries (20.7% of GDP, 2009; 21.09% of GDP, through third quarter 2010): Principal products--rice, coffee, cashews, maize, pepper (spice), sweet potato, pork, peanut, cotton, plus extensive aquaculture of both fish and shellfish species. Cultivated land--12.2 million hectares. Land use--21% arable; 28% forest and woodland; 51% other.
Industry and construction (40.3% of GDP, 2009; 40.85% of GDP, through third quarter 2010): Principal types--mining and quarrying, manufacturing, electricity, gas, water supply, cement, phosphate, and steel.
Services (39.1% of GDP, 2009; 38.06% of GDP, through third quarter 2010): Principal types--tourism, wholesale and retail, repair of vehicles and personal goods, hotel and restaurant, transport storage, telecommunications.
Trade (2009): Exports--$56.6 billion (through third quarter 2010: $51.5 billion). Principal exports--crude oil, garments/textiles, footwear, fishery and seafood products, rice (world’s second-largest exporter), pepper (spice; world’s largest exporter), wood products, coffee, rubber, handicrafts. Major export partners--U.S., EU, ASEAN, Japan, China, and South Korea. Imports--$68.8 billion (through third quarter 2010: $60 billion). Principal imports--machinery, oil and gas, iron and steel, garment materials, plastics. Major import partners--China, ASEAN, Japan, Taiwan, South Korea, and EU. Exports to U.S. (2009)--$12.3 billion. Imports from U.S. (2009)--$3.1 billion.

PEOPLE
Originating in what is now southern China and northern Vietnam, the Vietnamese people pushed southward over 2 millennia to occupy the entire eastern seacoast of the Indochinese Peninsula. Vietnam has 54 ethnic groups; ethnic Vietnamese or Kinh constitute approximately 85% of Vietnam's population. The next largest groups are ethnic Tay and Thai, which account for 1.89% and 1.8% of Vietnam's population and are concentrated in the country's northern highlands.

With a population of more than 900,000, Vietnam's Chinese community has historically played an important role in the Vietnamese economy. Restrictions on economic activity following reunification of the north and south in 1975 and a general deterioration in Vietnamese-Chinese relations caused increasing anxiety within the Chinese-Vietnamese community. As tensions between Vietnam and China reached their peak in 1978-79, culminating in a brief but bloody war in February-March 1979, some 450,000 ethnic Chinese left Vietnam by boat as refugees (many officially encouraged and assisted) or were expelled across the land border with China.

Other significant ethnic minority groups include central highland peoples (formerly collectively termed Montagnards) such as the Gia Rai, Bana, Ede, Xo Dang, Gie Trieng, and the Khmer Krom (Cambodians), who are concentrated near the Cambodian border and at the mouth of the Mekong River. Taken collectively, these groups made up a majority of the population in much of Vietnam's central highlands until the 1960s and 1970s. They now compose a significant minority of 25% to 35% of the provinces in that region.

Vietnamese is the official language of the country. It is a tonal language with influences from Thai, Khmer, and Chinese. Since the early 20th century, the Vietnamese have used a Romanized script introduced by the French. Previously, Chinese characters and an indigenous phonetic script were both used.

HISTORY
Vietnam's identity has been shaped by long-running conflicts, both internally and with foreign forces. In 111 BC, China's Han dynasty conquered northern Vietnam's Red River Delta and the ancestors of today's Vietnamese. Chinese dynasties ruled Vietnam for the next 1,000 years, inculcating it with Confucian ideas and political culture, but also leaving a tradition of resistance to foreign occupation. In 939 AD, Vietnam achieved independence under a native dynasty. After 1471, when Vietnam conquered the Champa Kingdom in what is now central Vietnam, the Vietnamese moved gradually southward, finally reaching the agriculturally rich Mekong Delta, where they encountered previously settled communities of Cham and Cambodians. As Vietnam's Le dynasty declined, powerful northern and southern families, the Trinh and Nguyen, fought civil wars in the 17th and 18th centuries. A peasant revolt originating in the Tay Son region of central Vietnam defeated both the Nguyen and the Trinh and unified the country at the end of the 18th century, but was itself defeated by a surviving member of the Nguyen family, who founded the Nguyen dynasty as Emperor Gia Long in 1802.

French Rule and the Anti-Colonial Struggle
In 1858, the French began their conquest of Vietnam starting in the south. They annexed all of Vietnam in 1885, governing the territories of Annan, Tonkin, and Cochin China, together with Cambodia and Laos, as French Indochina. The French ruled Cochin China directly as a French colony; Annan and Tonkin were established as French "protectorates." Vietnam's emperors remained in place in Hue, but their authority was strictly limited as French officials assumed nearly all government functions. In the early 20th century, Vietnamese intellectuals, many of them French educated, organized nationalist and communist-nationalist anti-colonial movements.

Japan's military occupation of Vietnam during World War II further stirred nationalist sentiment, as well as antipathy toward the French Vichy colonial regime, which took its direction from the Japanese until the Japanese took direct control in March 1945. Vietnamese communists under Ho Chi Minh organized a coalition of anti-colonial groups, the Viet Minh, though many anti-communists refused to join. The Viet Minh took advantage of political uncertainty in the weeks following Japan's surrender to take control of Hanoi and much of northern Vietnam. Ho Chi Minh announced the independence of the Democratic Republic of Vietnam on September 2, 1945.

North and South Partition
France's determination to reassert colonial authority in Vietnam led to failed talks and, after armed hostilities broke out in Haiphong at the end of 1946, an 8-year guerrilla war between the communist-led Viet Minh on one side and the French and their anti-communist nationalist allies on the other. Following the French defeat at Dien Bien Phu in May 1954, France and other parties, including Britain, China, the Soviet Union, the United States, and representatives of the Viet Minh and Bao Dai governments convened in Geneva, Switzerland for peace talks. On July 29, 1954, an Agreement on the Cessation of Hostilities in Vietnam was signed between France and the Democratic Republic of Vietnam. The United States observed, but did not sign, the agreement. French colonial rule in Vietnam ended.

The 1954 Geneva agreement provided for a cease-fire between communist and anti-communist nationalist forces, the temporary division of Vietnam at approximately the 17th parallel, provisional northern (communist) and southern (noncommunist) zone governments, and the evacuation of anti-communist Vietnamese from northern to southern Vietnam, as well as the movement of a smaller number of former communist-led Viet Minh anti-colonial fighters to the north. The agreement also called for an election to be held by July 1956 to bring the two provisional zones under a unified government, a provision that the South Vietnamese Government refused to accept, arguing that conditions for free elections throughout Vietnam were not present. On October 26, 1955, South Vietnam declared itself the Republic of Vietnam.

After 1954, North Vietnamese communist leaders consolidated their power and instituted a harsh agrarian reform and socialization program. During this period, some 450,000 Vietnamese, including a large number of Vietnamese Catholics, fled from the north to the south, while a much smaller number, mostly consisting of former Viet Minh fighters, relocated north. In the late 1950s, North Vietnamese leaders reactivated the network of communist guerrillas that had remained behind in the south. These forces--commonly known as the Viet Cong--aided covertly by the north, started an armed campaign against officials and villagers who refused to support the communist reunification cause.

American Assistance to the South
In December 1961, at the request of South Vietnamese President Ngo Dinh Diem, President Kennedy sent U.S. military advisers to South Vietnam to help the government there deal with the Viet Cong campaign. In the wake of escalating political turmoil in the south after a November 1963 generals' coup against President Diem, which resulted in his death, the United States increased its military support for South Vietnam. In March 1965, President Johnson sent the first U.S. combat forces to Vietnam. The American military role peaked in 1969 with an in-country force of 534,000. The Viet Cong's surprise Tet Offensive in January 1968 weakened the Viet Cong infrastructure and damaged American and South Vietnamese morale. In January 1969, the United States, governments of South and North Vietnam, and the Viet Cong met for the first plenary session of peace talks in Paris, France. These talks, which began with much hope, moved slowly. They finally concluded with the signing of a peace agreement, the Paris Accords, on January 27, 1973. The Accords called for a ceasefire in place in which North Vietnamese forces were permitted to remain in areas they controlled. Following the Accords, the South Vietnamese Government and the political representatives of the communist forces in the South, the Provisional Revolutionary Government, vied for control over portions of South Vietnam. The United States withdrew its forces, although reduced levels of U.S. military assistance continued, administered by the Defense Attaché Office.

Reunification
In early 1975, North Vietnamese regular military forces began a major offensive in the south, inflicting great damage to the south's forces. The communists took Saigon on April 30, 1975, and announced their intention to reunify the country. The Democratic Republic of Vietnam (north) absorbed the former Republic of Vietnam (south) to form the Socialist Republic of Vietnam on July 2, 1976.

After reunification, the government confiscated privately owned land and forced citizens to adopt collectivized agricultural practices. Hundreds of thousands of former South Vietnamese government and military officials, as well as intellectuals previously opposed to the communist cause, were sent to study socialist doctrine in re-education camps, where they remained for periods ranging from months to over 10 years.

Expectations that reunification of the country and its socialist transformation would be condoned by the international community were quickly dashed as the international community expressed concern over Vietnam's internal practices and foreign policy. Vietnam's 1978 invasion of Cambodia in particular, together with its increasingly tight alliance with the Soviet Union, appeared to confirm suspicions that Vietnam wanted to establish a Soviet-backed hegemony in Indochina.

Vietnam's invasion of Cambodia also heightened tensions that had been building between Vietnam and China. Beijing, which backed the Khmer Rouge regime in Cambodia, retaliated in early 1979 by initiating a brief, but bloody border war with Vietnam.

Vietnam's tensions with its neighbors, internal repression, and a stagnant economy contributed to a massive exodus from Vietnam. Fearing persecution, many ethnic Chinese in particular fled Vietnam by boat to nearby countries. Later, hundreds of thousands of other Vietnamese nationals fled as well, seeking temporary refuge in camps throughout Southeast Asia.

The continuing grave condition of the economy and the alienation from the international community became focal points of party debate. In 1986, at the Sixth Party Congress, there was an important easing of communist agrarian and commercial policies.

GOVERNMENT AND POLITICAL CONDITIONS
A new state constitution was approved in April 1992, reaffirming the central role of the Communist Party of Vietnam (CPV) in politics and society, and outlining government reorganization and increased economic freedom. Though Vietnam remains a one-party state, adherence to ideological orthodoxy has become less important than economic development as a national priority.

The most important powers within the Vietnamese Government--in addition to the Communist Party--are the executive agencies created by the 1992 constitution: the offices of the president and the prime minister. The Vietnamese President, presently Nguyen Minh Triet, functions as head of state but also serves as the nominal commander of the armed forces and chairman of the Council on National Defense and Security. The Prime Minister of Vietnam, presently Nguyen Tan Dung, heads a cabinet currently composed of five deputy prime ministers and the heads of 22 ministries and agencies, all confirmed by the National Assembly.

Notwithstanding the 1992 constitution's reaffirmation of the central role of the Communist Party, the National Assembly, according to the constitution, is the highest representative body of the people and the only organization with legislative powers. It has a broad mandate to oversee all government functions. Once seen as little more than a rubber stamp, the National Assembly has become more vocal and assertive in exercising its authority over lawmaking, particularly in recent years. However, the National Assembly is still subject to Communist Party direction. More than 90% of the deputies in the National Assembly are party members. The assembly meets twice yearly for 7-10 weeks each time; elections for members are held every 5 years, although its Standing Committee meets monthly and there are now over 100 "full-time" deputies who function on various committees. In 2007, the assembly introduced parliamentary "question time," in which cabinet ministers must answer often pointed questions from National Assembly members. There is a separate judicial branch, but it is still relatively weak. There are few lawyers and trial procedures are rudimentary.

The present 15-member Politburo, selected at the Tenth Party Congress of the Communist Party of Vietnam in April 2006 and headed by Communist Party General Secretary Nong Duc Manh, determines government policy; its Secretariat, headed by Truong Tan Sang, oversees day-to-day policy implementation. In addition, the Communist Party's Central Military Commission, which is composed of select Politburo members and additional military leaders, determines military policy.

A Party Congress meets every 5 years to set the direction of the party and the government. The most recent Congress, the Tenth, met in April 2006 and comprised 1,176 delegates. The Eleventh Party Congress is scheduled to convene in January 2011. The 161-member Central Committee (with an additional 20 alternate members), is elected by the Party Congress and usually meets at least twice a year. The most recent Central Committee Plenum met in July 2009.

Principal Government Officials
President--Nguyen Minh Triet
Prime Minister--Nguyen Tan Dung
National Assembly Chairman--Nguyen Phu Trong
Deputy Prime Minister and Minister of Foreign Affairs--Pham Gia Khiem
Ambassador to the United States--Le Cong Phung
Ambassador to the United Nations--Le Luong Minh

Politburo
(Tenth Party Congress Politburo, named April 25, 2006; listed in the order it was announced, including the individuals' current positions.)

General Secretary of CPV Central Committee, 10th Party Congress--Nong Duc Manh
Minister of Public Security--Le Hong Anh
Prime Minister--Nguyen Tan Dung
State President--Nguyen Minh Triet

Politburo Member and Standing Member of the Secretariat Central Committee of Communist Party--Truong Tan Sang
National Assembly Chairman--Nguyen Phu Trong
Deputy Prime Minister and Minister of Foreign Affairs--Pham Gia Khiem
Minister of Defense--Phung Quang Thanh
Deputy Prime Minister and Chairman, Party’s West North Committee--Truong Vinh Trong
Secretary of HCMC Party's Committee--Le Thanh Hai
Standing Deputy Prime Minister--Nguyen Sinh Hung
Secretary of Hanoi Party's Committee--Pham Quang Nghi
Chairman, Party Organization and Personnel Commission--Ho Duc Viet
Chairman, Party Control Commission--Nguyen Van Chi
Chairman, Party Education and Propaganda Commission--To Huy Rua

Vietnam maintains an embassy in the U.S. at 1233 20th Street, NW, #400, Washington DC 20036 (tel. 202-861-0737; fax 202-861-0917); Internet home page: www.vietnamembassy-usa.org. There is a consulate general in San Francisco, located at 1700 California Street, Suite 430, San Francisco, CA 94109 (tel. 415-922-1707; fax 415-922-1848); Internet homepage: http://www.vietnamconsulate-sf.org. There also is a consulate general in Houston, located at 5251 Westheimer Rd, Suite 1100, Houston, Texas 77056 (tel. 713-850-1233; fax 713-810-0159); Internet homepage: http://vietnamconsulateinhouston.org.

ECONOMY
Following economic stagnation after reunification from 1975 to 1985, the 1986 Sixth Party Congress approved broad economic reforms (known as "Doi Moi" or renovation) that introduced market reforms, opened up the country for foreign investment, and dramatically improved Vietnam's business climate. Vietnam became one of the fastest-growing economies in the world, averaging around 8% annual gross domestic product (GDP) growth from 1990 to 1997 and 6.5% from 1998-2003. From 2004 to 2007, GDP grew over 8% annually, slowing slightly to 6.2% in 2008 and 5.3% in 2009, and then recovering to 6.52% through third quarter 2010. Viewed over time, foreign trade and foreign direct investment (FDI) have improved significantly. The average annual foreign investment commitment has risen sharply since foreign investment was authorized in 1988, although the global economic crisis affected FDI in 2009. In 2009, disbursed FDI capital totaled $10.0 billion, down 13% compared to 2008. Registered FDI (including new and additional capital) was $21.4 billion in 2009, a fall of about 70% compared to 2008. In 2008, actual disbursed FDI was $11.5 billion and registered FDI was $71.7 billion. From 1990 to 2005, agricultural production nearly doubled, transforming Vietnam from a net food importer to the world's second-largest exporter of rice. In 2009, Vietnam’s exports ($56.6 billion) were down by 9.7%. Vietnam’s imports ($68.8 billion) were down by 14.7% from 2008, but the country was still running a structural trade deficit, reaching $12.2 billion. Through the third quarter of 2010, while exports ($51.5 billion) and imports ($60 billion) were both up about 23% year-on-year, by the third quarter the trade deficit had reached $8.5 billion.

The shift away from a centrally planned economy to a more market-oriented economic model has improved the quality of life for many Vietnamese. Per capita income rose from $220 in 1994 to $1,052 in 2009. Year-on-year inflation was reduced to 6.8% in 2009 from 23% in 2008. Experts doubt, however, that the Vietnamese Government can reach its 2010 Consumer Price Index (CPI) target of 8%, given that inflation has remained above target for 8 straight months and September CPI was at a 6-month high. The average Vietnamese savings rate is about 25% of GDP. Unemployment remains low, but has been rising in recent years. Unemployment was 2.9% in 2009, up from 2.4% in 2008, with urban unemployment being higher (4.46% in 2009) than rural (2.25% in 2009).

The Vietnamese Government still holds a tight rein over major sectors of the economy through large state-owned economic groups and enterprises and much of the banking system. The government has plans to reform key sectors and partially privatize state-owned enterprises, but implementation has been gradual and the state sector still accounts for approximately 36% of GDP. Greater emphasis on private sector development is critical for job creation.

The 2001 entry-into-force of the Bilateral Trade Agreement (BTA) between the U.S. and Vietnam was a significant milestone for Vietnam's economy and for normalization of U.S.-Vietnam relations. Bilateral trade between the United States and Vietnam has expanded dramatically, rising from $2.91 billion in 2002 to $15.4 billion in 2009. The U.S. is Vietnam's second-largest trade partner overall (after China).

Implementation of the BTA, which includes provisions on trade in goods and services, enforcement of intellectual property rights, protection for investments, and transparency, fundamentally changed Vietnam's trade regime and helped it prepare to accede to the World Trade Organization (WTO) in 2007.

Vietnam was granted unconditional normal trade relations (NTR) status by the United States in December 2006. To meet the obligations of WTO membership, Vietnam revised nearly all of its trade and investment laws and guiding regulations and opened up large sectors of its economy to foreign investors and exporters.

A U.S.-Vietnam Trade and Investment Framework Agreement (TIFA), a bridge to future economic cooperation, was signed in 2007 during President Triet's visit to the United States. The first TIFA Council occurred in December 2007 in Washington, and there have been five TIFA meetings since then. During Prime Minister Dung's June 2008 visit, the United States and Vietnam committed to undertake Bilateral Investment Treaty (BIT) negotiations, and have completed three rounds of talks since then.

Agriculture and Industry
As in the rest of Asia, farms in Vietnam tend to be very small, and are usually less than one hectare (2.5 acres) each. Rice and other farm outputs are quite profitable, on a per-kilogram basis, but the total income from these small operations is increasingly insufficient to cover daily household needs. Off-farm income is necessary, and growing in importance. Due to its high productivity, Vietnam is currently a net exporter of agricultural products. Besides rice, key exports are coffee (robusta), pepper (spice), cashews, tea, rubber, wood products, and fisheries products. In 2009, Vietnam was ranked 17 among all suppliers of food and agricultural products to the United States, a strong indicator of Vietnam’s growing importance as a global supplier of key agricultural commodities. Agriculture's share of economic output has declined, falling as a share of GDP from 42% in 1989 to 21% through third quarter 2010, as production in other sectors of the economy has risen.

Vietnam's industrial production has also grown. Industry and construction contributed 40.9% of GDP in the first 9 months of 2010, up from 27.3% in 1985. Subsidies have been cut, though state enterprises still receive priority access to resources, including land and capital. The government is also continuing the slow process of "equitizing" (e.g., transforming state enterprises into shareholding companies and distributing a portion of the shares to management, workers, and private foreign and domestic investors) a significant number of smaller state enterprises. However, to date the government continues to maintain control of the largest and most important companies.

Trade and Balance of Payments
To compensate for drastic cuts in Soviet-bloc support after 1989, Vietnam liberalized trade, devalued its currency to increase exports, and embarked on a policy of regional and international economic re-integration. Vietnam has demonstrated its commitment to trade liberalization in recent years, and integration with the world economy has become one of the cornerstones of its reform program. Vietnam has locked in its intention to create a more competitive and open economy by committing to several comprehensive international trade agreements, including the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA) and the U.S.-Vietnam Bilateral Trade Agreement (BTA). Vietnam's accession to the World Trade Organization further integrated Vietnam into the global economy. In February 2009, Vietnam officially joined the Trans-Pacific Partnership (TPP) as an “associate member.”

As a result of these reforms, exports expanded significantly, growing by as much as 20%-30% in some years. Exports accounted for about 62% of GDP in 2009 and 72% of GDP through the third quarter of 2010. Imports have also grown rapidly, and Vietnam has maintained a structural trade deficit, reaching $12.1 billion in 2009 and $8.5 billion through third quarter 2010. Vietnam's total external debt, amounting to 32.8% of GDP in 2009, was estimated at around $30.1 billion.

FOREIGN RELATIONS
During the second Indochina war (1954-75), North Vietnam sought to balance relations with its two major allies, the Soviet Union and China. Tensions with China began to grow during the Chinese Cultural Revolution, and by 1975, Beijing had become increasingly critical of Hanoi's growing ties with Moscow. Over the next 4 years, Beijing's growing support for Cambodia's Khmer Rouge, which in 1978 initiated bloody attacks across its border with Vietnam, reinforced Vietnamese suspicions of China's motives.

Vietnam-China relations deteriorated significantly after Hanoi instituted a ban in March 1978 on private trade, which had a particularly large impact on southern Vietnam's ethnic Chinese community. Following Vietnam's December 1978 invasion of Cambodia, China in February 1979 launched a month-long retaliatory incursion over Vietnam's northern border. Faced with severance of Chinese aid and strained international relations, Vietnam established even closer ties with the Soviet Union and its allies in the Council for Mutual Economic Assistance (Comecon). Through the 1980s, Vietnam received nearly $3 billion a year in economic and military aid from the Soviet Union and conducted most of its trade with that country and with other Comecon countries. However, Soviet and East bloc economic aid declined during the perestroika era and ceased completely after the breakup of the Soviet Union.

Vietnam did not begin to emerge from international isolation until it withdrew its troops from Cambodia in 1989. Within months of the 1991 Paris Agreements, Vietnam established diplomatic and economic relations with ASEAN, as well as with most of the countries of Western Europe and Northeast Asia. China reestablished full diplomatic ties with Vietnam in 1991, and the two countries began joint efforts to demarcate their land and sea borders, expand trade and investment ties, and build political relations.

Over the past decade, Vietnam has recognized the increasing importance of growing 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. Vietnam has stepped up its efforts to attract foreign capital from the West and regularize relations with the world financial system. In the 1990s, following the lifting of the American veto on multilateral loans to the country, Vietnam became a member of the World Bank, the International Monetary Fund, and the Asian Development Bank. The country has expanded trade with its East Asian neighbors as well as with countries in Western Europe and North America. Of particular significance was Vietnam's acceptance into the Association of Southeast Asian Nations (ASEAN) in July 1995. In recent years, Vietnam's influence in ASEAN has expanded significantly; the country took over as Chairman of ASEAN in January 2010, a position it will hold through the calendar year. In addition, Vietnam joined the Asia-Pacific Economic Cooperation forum (APEC) in November 1998 and hosted the ASEAN summit in 2001 and APEC in 2006. In December 2009, Vietnam completed a 2-year term as a non-permanent member of the United Nations Security Council.

While Vietnam has not experienced war since its withdrawal from Cambodia, tensions have periodically flared between Vietnam and China, primarily over their overlapping maritime claims in the South China Sea. Vietnam and China each assert claims to the Spratly and Paracel Islands, archipelagos in the potentially oil-rich area of the South China Sea. Malaysia, the Philippines, Brunei, and Taiwan also claim all or part of the South China Sea. Over the years, conflicting claims have produced small-scale armed altercations in the area; in 1988, 70 Vietnamese sailors died in a confrontation with China in the Spratlys. China's assertion of "indisputable sovereignty" over the Spratly Islands and the entire South China Sea has elicited concern from Vietnam and its Southeast Asia neighbors. Tensions escalated in the latter half of 2007 as, according to press reports, China pressured foreign oil companies to abandon their oil and gas exploration contracts with Vietnam in the South China Sea, including pressuring U.S. firm ExxonMobil to drop an exploration agreement with Vietnam in July 2008 in the same waters. Vietnamese students staged several anti-China demonstrations in response, prompting a warning from the Chinese Foreign Ministry spokesman that Hanoi's failure to quell the demonstrations was harming relations. China's efforts in the summer of 2009 to strictly enforce its unilateral fishing ban in disputed waters led to the detention for several weeks of more than two dozen Vietnamese fishermen.

In contrast, Vietnam has made significant progress with China in delineating its northern land border and the Gulf of Tonkin, pursuant to a Land Border Agreement signed in December 1999, and an Agreement on Borders in the Gulf of Tonkin signed in December 2000. The two sides completed demarcation of their land border in December 2008 and have reached understanding on maritime boundaries in the mouth of the Tonkin Gulf.

U.S.-VIETNAM RELATIONS
President Bill Clinton announced the formal normalization of diplomatic relations with the Socialist Republic of Vietnam on July 11, 1995. Subsequent to President Clinton's normalization announcement, in August 1995, both nations upgraded their Liaison Offices opened in January 1995 to embassy status. As diplomatic ties between the nations grew, the United States opened a consulate general in Ho Chi Minh City, and Vietnam opened a consulate general in San Francisco. In 2009, the United States received permission to open a consulate in Danang; in 2010, Vietnam officially inaugurated a consulate general in Houston.

U.S. relations with Vietnam have become increasingly cooperative and broad-based in the years since political normalization. A series of bilateral summits have helped drive the improvement of ties, including President George W. Bush's visit to Hanoi in November 2006, President Triet's visit to Washington in June 2007, and Prime Minister Dung's visits to Washington in June 2008 and April 2010. The two countries hold an annual dialogue on human rights, which resumed in 2006 after a 2-year hiatus. Vietnam and the United States signed a Bilateral Trade Agreement in July 2000, which went into force in December 2001. In 2003, the two countries signed a Counternarcotics Letter of Agreement (amended in 2006), a Civil Aviation Agreement, and a textile agreement. In January 2007, Congress approved Permanent Normal Trade Relations (PNTR) for Vietnam. In October 2008, the U.S. and Vietnam inaugurated annual political-military talks and policy planning talks to consult on regional security and strategic issues. In August 2010, the U.S. Department of Defense and Vietnam’s Ministry of Defense held the first round of annual high-level defense talks, known as the Defense Policy Dialogue. Bilateral and regional diplomatic engagement has expanded at ASEAN, which Vietnam chairs in 2010, and continues through APEC.

Vietnam's suppression of political dissent has continued to be a main issue of contention in relations with the United States, drawing criticism from successive administrations, as well as from members of Congress and the U.S. public. Since October 2009, Vietnam's government has convicted more than 24 political dissidents, and has arrested an additional 15 others. The government has continued to further tighten controls over the Internet, press, and freedom of speech. In 2009, two journalists were arrested and convicted in connection with their reporting on high-level corruption, and several journalists and editors at leading newspapers have been fired. Several Internet bloggers were also arrested, jailed, and convicted after writing about corruption, and protesting China's actions in the disputed Spratly and Paracel Islands and Chinese mining of bauxite in the central highlands.

In contrast, Vietnam has continued to make progress on expanding religious freedom, although significant issues remain. In 2005, Vietnam passed comprehensive religious freedom legislation, outlawing forced renunciations and permitting the official recognition of new denominations. Since that time, the government has granted official national recognition or registration to a number of new religions and religious groups, including eight more Protestant denominations, and has registered hundreds of local congregations particularly in the central highlands. As a result, in November 2006, the Department of State lifted the designation of Vietnam as a "Country of Particular Concern," based on a determination that the country was no longer a serious violator of religious freedoms, as defined by the International Religious Freedom Act. This decision was reaffirmed by the Department of State in 2007, 2008, and 2009. Nevertheless, there is room for further progress. The government's slow pace of church registration, particularly in the northwest highlands, and harassment of certain religious leaders for their political activism, including leaders of the unrecognized United Buddhist Church of Vietnam and Hoa Hao faith were an ongoing source of U.S. concern. Violence against the Plum Village Buddhist order at the Bat Nha Pagoda in Lam Dong and Catholic parishioners in Con Dau parish outside of Danang and outside of Hanoi at Dong Chiem parish at the hands of the police and organized mobs was particularly troubling.

As of November 12, 2010, the U.S. Government listed 1,711 Americans unaccounted for in Southeast Asia, including 1,310 in Vietnam. Since 1973, 935 Americans have been accounted for, including 661 in Vietnam.

Additionally, the Department of Defense has confirmed that of the 196 individuals who were "last known alive" (LKA) in Vietnam, the U.S. Government has determined the fate of all but 25. The Joint POW/MIA Accounting command (JPAC) conducts four major investigation and recovery periods a year in Vietnam, during which specially trained U.S. military and civilian personnel investigate and excavate hundreds of cases in pursuit of the fullest possible accounting. Unrestricting areas previously denied to JPAC personnel has been a recent highlight of cooperation by the Socialist Republic of Vietnam, as was the first-ever turnover of POW/MIA-related artifacts from the Vietnam Military History Museum, apparently a reciprocal action in response to U.S. turnovers of Vietnamese war artifacts. In June 2009, a coastal search mission by the oceanographic survey ship USNS Heezen was the first of its kind, creating the potential to recover hundreds of underwater crash sites. The U.S. would still like to see the provision of archival documents related to U.S. losses along the wartime Ho Chi Minh Trail, as well as more openness in general with regard to Vietnam’s wartime archives. The United States considers achieving the fullest possible accounting of Americans missing and unaccounted for in Indochina to be one of its highest priorities with 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. In 2009, the United States exported $3.1 billion in goods to Vietnam and imported $12.3 billion in goods from Vietnam. Similarly, U.S. companies continue to invest directly in the Vietnamese economy. During 2009, the U.S. private sector committed $9.8 billion to Vietnam in foreign direct investment. Another sign of the expanding bilateral relationship is the signing of a Bilateral Air Transport Agreement in December 2003. Several U.S. carriers already have third-party code sharing agreements with Vietnam Airlines. Direct flights between Ho Chi Minh City and San Francisco began in December 2004. The Bilateral Air Transport Agreement was amended in October 2008 to fully open markets for cargo air transportation. Vietnam and the United States also signed a Bilateral Maritime Agreement in March 2007 that opened the maritime transport and services industry of Vietnam to U.S. firms.

Vietnam remains heavily contaminated by explosive remnants of war, primarily in the form of unexploded ordnance (UXO) including extensive contamination by cluster munitions dating from the war with the United States. The United States is the largest single donor to UXO/mine action. The Department of State continues to assist Vietnam in detecting and clearing unexploded ordnance, educating the public on the risks of UXO and providing assistance to the victims of UXO. Since 1993, U.S. has contributed over $50 million in clearance, education, and victims’ assistance programs.

While legacy issues such as UXO/demining, MIA accounting, and Agent Orange provided the foundations for the U.S.-Vietnam defense relationship, mutual interest in addressing the challenges of humanitarian assistance/disaster relief, search and rescue, and maritime security have allowed the defense relationship to accelerate in the past 3 years, with Vietnam participating in U.S.-provided capacity-building training in these areas. Many of these topics are discussed in annual bilateral defense discussions. In April 2009, a delegation of senior Vietnamese Navy and Air Force officers participated in a fly-out to the USS John C. Stennis in international waters off the coast of Vietnam. During August 2010, another delegation of government and military officials participated in a fly-out and tour aboard the USS George Washington just prior to the USS John S. McCain visit to Danang, Vietnam.

Two years after its first visit to Vietnam, the hospital ship USNS Mercy paid a port call to Quy Nhon in June 2010, where it provided medical and dental treatment to thousands; the USNS Mercy's June 2008 visit to Nha Trang reached over 11,000 Vietnamese patients. Other U.S. Navy visits in 2010 included the USNS Richard E. Byrd for maintenance and repair. Vietnam continues to observe multinational exercises such as the Cooperation Afloat Readiness and Training (CARAT) organized by the U.S. Pacific Fleet and the yearly GPOI CAPSTONE exercise organized by the U.S. Pacific Command. An active partner in nonproliferation regimes, Vietnam also takes full advantage of expertise, equipment, and training available under the Export Control and Related Border Security (EXBS) program and signed a memorandum of understanding with the United States to initiate a program--known as Megaports--to help Vietnam detect and identify weapons of mass destruction and their components at its commercial ports. Vietnam recently agreed to join the Global Initiative to Combat Nuclear Terrorism, and Prime Minister Dung was an active participant in President Barack Obama's April 2010 Nuclear Security Summit in Washington.

Principal U.S. Embassy Official
Ambassador--Michael W. Michalak

The U.S. Embassy in Vietnam is located at 7 Lang Ha, Ba Dinh District, Hanoi, Socialist Republic of Vietnam (tel. 84-4-3850-5000; fax 84-4-3850-5010).

Principal U.S. Consulate General Official
Consul General--An T. Le

The U.S. Consulate General in Ho Chi Minh City is located at 4 Le Duan, District 1, Ho Chi Minh City, Socialist Republic of Vietnam (tel. 84-8-3520-4200; fax 84-8-3520-4244).

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Kyrgyzstan

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October 26, 2009Bureau of South and Central Asian Affairs

Background Note: Kyrgyzstan



Official Name: Kyrgyz Republic



PROFILE


Geography
Area: 77,181 sq. mi.
Cities: Bishkek (capital), Osh, Cholpon Ata, Karakol.
Terrain: 90% mountainous, with some desert regions. Elevation extremes--lowest point: Kulundy village in the Batken province 401 m; highest point: Jengish Chokusu (Pik Pobedy) 7,439 m.

People
Nationality: Kyrgyzstani.
Population (July 2008): 5,356,869.
Annual growth rate (2008): 1.38%.
Ethnic groups (2007): Kyrgyz 68.9%; Russian 9.1%; Uzbek 14.4%; Dungan (ethnic Chinese Muslims) 1%; Uighurs 1%; Tajik 0.9%, Kazakh 0.8%, Tatars 0.7%; Korean 0.4%, German 0.3%.
Main religions: Islam; Russian Orthodox.
Languages: Kyrgyz (state); Russian (official, 2001).
Education: Nine years compulsory. Literacy--98.7%.
Health (2006): Infant mortality rate--29.2 deaths/1,000 live births. Life expectancy--67.7 years.
Population distribution (2006): Urban 64.7%; rural 35.3%.

Government
Type: Republic.
Independence: August 31, 1991 (from the Soviet Union).
Constitution: May 5, 1993; amended in 1996, 1998, 2003, 2006, and 2007.
Branches: Executive--president, prime minister. Legislative--parliament. Judicial--Supreme Court, Constitutional Court, local courts, Procurator-General.
Administrative subdivisions: Seven oblasts and the municipality of Bishkek.
Political parties and leaders: Ak Jol People's Party, no formal leader, but this is the party of President Bakiyev; Social Democratic Party of Kyrgyzstan, Almazbek Atambayev; Party of Communists of Kyrgyzstan, Iskhak Masaliev; Ar Namys (Dignity) Party, Feliks Kulov; Ata-Meken (Fatherland) Party, Omurbek Tekebaev; Jany Kyrgyzstan Party, Usen Sydykov; Erkindik (Freedom) Party, Shamshibek Utebaev; Zamandash Party, Muktarbek Omurakunov; Ak Shumkar Party, Temir Sariyev; Asaba (Flag), Azimbek Beknazarov; Green Party, Erkin Bulekbayev.

Economy
GDP: 2008 (est.), $4.6 billion; 2007, $3.75 billion; 2006, $2.8 billion; 2003, $1.9 billion.
GDP growth rate in 2008: 7.6%.
Inflation rate at end of 2008: 24.4%.
GDP per capita (2008 est.): $870.
Unemployment rate (as of the end of 2008): 11.1%.
Natural resources: Abundant hydropower; significant deposits of gold and rare earth metals; locally exploitable coal, oil, and natural gas; other deposits of iron, bauxite, copper, tin, molybdenum, mercury, and antimony.
Agriculture: Products--tobacco, cotton, wheat, vegetables (potatoes, sugar beets, beans), fruits (apples, apricots, peaches, grapes), berries, sheep, goats, cattle, wool.
Industry: Types--small machinery (electric motors, transformers), light industry (cotton and wool processing, textiles, food processing), construction materials (cement, glass, slate), shoes, furniture, mining, energy.
Trade: Exports (2008)--$1.6 billion: cotton, wool, meat, tobacco, gold, mercury, uranium, hydropower, machinery, shoes. Partners--Switzerland 27.3%, Russia 19.2%, Uzbekistan 14.3%, Kazakhstan 11.3%, France 6.7%, Afghanistan 2.8%. Imports--$3.3 billion: oil and gas, machinery and equipment, foodstuffs. Partners--Russia 44.3%, China 14.6%, Kazakhstan 11.4%, Uzbekistan 4.4%, U.S. 3.0%.
Total external debt mid-2008 was $3.16 billion, of which $2.19 billion was public debt.

PEOPLE AND HISTORY
According to recent findings of Kyrgyz and Chinese historians, Kyrgyz history dates back to 201 B.C. The earliest descendents of the Kyrgyz people, who are believed to be of Turkic descent, lived in the northeastern part of what is currently Mongolia. Later, some of their tribes migrated to the region that is currently southern Siberia and settled along the Yenisey River, where they lived from the 6th until the 8th centuries. They spread across what is now the Tuva region of the Russian Federation, remaining in that area until the rise of the Mongol Empire in the 13th century, when the Kyrgyz began migrating south. In the 12th century, Islam became the predominant religion in the region. Most Kyrgyz are Sunni Muslims of the Hanafi school.

During the 15th-16th centuries, the Kyrgyz people settled in the territory currently known as the Kyrgyz Republic. In the early 19th century, the southern territory of the Kyrgyz Republic came under the control of the Khanate of Kokand, and the territory was formally incorporated into the Russian Empire in 1876. The Russian takeover instigated numerous revolts against tsarist authority, and many Kyrgyz opted to move into the Pamir mountains or to Afghanistan. The suppression of the 1916 rebellion in Central Asia caused many Kyrgyz to migrate to China.

Soviet power was initially established in the region in 1918, and in 1924, the Kara-Kyrgyz Autonomous Oblast was created within the Russian Federal Socialist Republic. (The term Kara-Kyrgyz was used until the mid-1920s by the Russians to distinguish them from the Kazakhs, who were also referred to as Kyrgyz.) In 1926, it became the Kyrgyz Autonomous Soviet Socialist Republic. On December 5, 1936, the Kyrgyz Soviet Socialist Republic (SSR) was established as a full Union Republic of the U.S.S.R.

During the 1920s, the Kyrgyz Republic saw considerable cultural, educational, and social change. Economic and social development also was notable. Literacy increased, and a standard literary language was introduced. The Kyrgyz language belongs to the Southern Turkic group of languages. In 1924, an Arabic-based Kyrgyz alphabet was introduced, which was replaced by Latin script in 1928. In 1941 Cyrillic script was adopted. Many aspects of the Kyrgyz national culture were retained despite suppression of nationalist activity under Joseph Stalin, who controlled the Soviet Union from the late 1920s until 1953.

The early years of glasnost in the late 1980s had little effect on the political climate in the Kyrgyz Republic. However, the republic's press was permitted to adopt a more liberal stance and to establish a new publication, Literaturny Kirghizstan, by the Union of Writers. Unofficial political groups were forbidden, but several groups that emerged in 1989 to deal with an acute housing crisis were permitted to function.

In June 1990, ethnic tensions between Uzbeks and Kyrgyz surfaced in an area of the Osh Oblast, where Uzbeks form a majority of the population. Violent confrontations ensued, and a state of emergency and curfew were introduced. Order was not restored until August 1990.

The early 1990s brought measurable change to the Kyrgyz Republic. The Kyrgyzstan Democratic Movement (KDM) had developed into a significant political force with support in parliament. In an upset victory, Askar Akayev, the president of the Kyrgyz Academy of Sciences, was elected to the presidency in October 1990. The following January, Akayev introduced new government structures and appointed a new government comprised mainly of younger, reform-oriented politicians. In December 1990, the Supreme Soviet voted to change the republic's name to the Republic of Kyrgyzstan. (In 1993, it became the Kyrgyz Republic.) In February 1991, the name of the capital, Frunze, was changed back to its pre-revolutionary name--Bishkek.

Despite these moves toward independence, economic realities seemed to work against secession from the U.S.S.R. In a referendum on the preservation of the U.S.S.R. in March 1991, 88.7% of the voters approved a proposal to retain the U.S.S.R. as a "renewed federation."

On August 19, 1991, when the State Committee for the State of Emergency (SCSE) assumed power in Moscow, there was an attempt to depose Akayev in Kyrgyzstan. After the coup collapsed the following week, Akayev and Vice President German Kuznetsov announced their resignations from the Communist Party of the Soviet Union (CPSU), and the entire politburo and secretariat resigned. This was followed by the Supreme Soviet vote declaring independence from the U.S.S.R. on August 31, 1991. Kyrgyz was announced as the state language in September 1991. (In December 2001, through a constitutional amendment, the Russian language was given official status.)

In October 1991, Akayev ran unopposed and was elected President of the new independent republic by direct ballot, receiving 95% of the votes cast. Together with the representatives of seven other republics, he signed the Treaty of the New Economic Community that same month. On December 21, 1991, the Kyrgyz Republic formally entered the new Commonwealth of Independent States (CIS).

In 1993, allegations of corruption against Akayev's closest political associates blossomed into a major scandal. One of those accused of improprieties was Prime Minister Chyngyshev, who was dismissed for ethical reasons in December. Following Chyngyshev's dismissal, Akayev dismissed the government and called upon the last communist premier, Apas Djumagulov, to form a new one. In January 1994, Akayev initiated a referendum asking for a renewed mandate to complete his term of office. He received 96.2% of the vote.

A new constitution was passed by the parliament in May 1993. In 1994, however, the parliament failed to produce a quorum for its last scheduled session prior to the expiration of its term in February 1995. President Akayev was widely accused of having manipulated a boycott by a majority of the parliamentarians. Akayev, in turn, asserted that the communists had caused a political crisis by preventing the legislature from fulfilling its role. Akayev scheduled an October 1994 referendum, overwhelmingly approved by voters, which proposed two amendments to the constitution--one that would allow the constitution to be amended by means of a referendum, and the other creating a new bicameral parliament called the Jogorku Kenesh.

Elections for the two legislative chambers--a 35-seat full-time assembly and a 70-seat part-time assembly--were held in February 1995 after campaigns considered remarkably free and open by most international observers, although the election-day proceedings were marred by widespread irregularities. Independent candidates won most of the seats, suggesting that personalities prevailed over ideologies. The new parliament convened its initial session in March 1995. One of its first orders of business was the approval of the precise constitutional language on the role of the legislature.

On December 24, 1995, President Akayev was reelected for another 5-year term with wide support (75% of vote) over two opposing candidates. President Akayev used government resources and state-owned media to carry out his campaign. Three (out of six) candidates were de-registered shortly before the election.

A February 1996 referendum--in violation of the constitution and the law on referendums--amended the constitution to give President Akayev more power. Although the changes gave the president the power to dissolve parliament, it also more clearly defined the parliament's powers. Since that time, the parliament has demonstrated real independence from the executive branch.

An October 1998 referendum approved constitutional changes, including increasing the number of deputies in the lower house, reducing the number of deputies in the upper house, providing for 25% of lower house deputies to be elected by party lists, rolling back parliamentary immunity, introducing private property, prohibiting adoption of laws restricting freedom of speech and mass media, and reforming the state budget.

Two rounds of parliamentary elections were held on February 20, 2000 and March 12, 2000. With the full backing of the United States, the Organization for Security and Cooperation in Europe (OSCE) reported that the elections failed to comply with commitments to free and fair elections and hence were invalid. Questionable judicial proceedings against opposition candidates and parties limited the choice of candidates available to Kyrgyz voters, while state-controlled media only reported favorably on official candidates. Government officials put pressure on independent media outlets that favored the opposition. The presidential election that followed later in 2000 also was marred by irregularities and was not declared free and fair by international observers.

March 2002 events in the southern district of Aksy, where six people protesting the arbitrary arrest of an opposition politician were shot dead by police, engendered nationwide protests. President Akayev initiated a constitutional reform process, which initially included the participation of a broad range of government, civil, and social representatives in an open dialogue. The reform process resulted in a February 2003 referendum, which was marred by voting irregularities. The amendments to the constitution approved by the referendum resulted in further control by the president and weakened the parliament and the Constitutional Court. Under the new constitution, the previously bicameral parliament became a 75-seat unicameral legislature following the 2005 parliamentary elections.

Parliamentary elections were held February 27 and March 13, 2005. The United States agreed with the findings of the OSCE that while the elections failed to comply with commitments to free and fair elections, there were improvements over the 2000 elections, notably the use of indelible ink, transparent ballot boxes, and generally good access by election observers.

Sporadic protests against widespread fraud during the parliamentary runoff elections in March 2005 erupted into calls for the government to resign. By March 24, 15,000 pro-opposition demonstrators called for the resignation of the president and his regime in Bishkek. Some injuries were reported when opposition demonstrators were attacked by police and pro-government thugs. Protestors seized the presidential administration building, after which President Akayev left the country for Kazakhstan, and then Russia. Looting broke out in parts of Bishkek on the evening of March 24, causing an estimated $100 million in damage.

Opposition leaders, caught by surprise by developments, moved to form a broadly inclusive "Committee of National Unity." Opposition leader Kurmanbek Bakiyev was named acting President and Prime Minister. Bakiyev formed an alliance with primary rival Feliks Kulov whereby Kulov agreed to drop out of the presidential race if Bakiyev appointed him Prime Minister upon winning the elections.

Bakiyev easily won the July 10, 2005 presidential elections with over 88% of the vote. An unprecedented number of domestic and international observers monitored the elections and noted significant improvements in the electoral process over the parliamentary elections, although there were some reports of irregularities.

Opposition groups held a series of demonstrations in 2006, including the entire first week of November, to protest the lack of progress on reform, in particular of the constitution, promised by President Bakiyev in 2005. The Kyrgyz parliament adopted amendments to the constitution and President Bakiyev signed the amended constitution on November 9, 2006, which limited the powers of the president and increased the role of parliament. After the government resigned on December 19, the Kyrgyz parliament voted on December 30 to adopt new amendments restoring some of the presidential powers lost in November. President Bakiyev signed the changes into law January 15, 2007.

In March 2007, President Bakiyev appointed opposition leader Almaz Atambayev as Prime Minister. A week-long opposition protest in April 2007 ended when police cleared the main Ala-Too Square in Bishkek.

In September 2007, the Constitutional Court invalidated the November 2006 and December 2006 versions of the constitution. President Bakiyev then called a snap national referendum on a new version of the constitution, which strengthened the powers of the president and provided for a parliament elected by party lists. The new constitution was approved in an October 2007 referendum that was marked by serious irregularities, including massive inflation of turnout figures. President Bakiyev then dissolved the parliament, calling for new elections. The December 2007 elections were deeply flawed, with the new pro-presidential Ak Jol party gaining 71 out of 90 seats. The largest opposition party, Ata Meken, did not gain any seats, despite probably receiving enough votes to meet the regional thresholds required to enter parliament. Following the elections, a government was formed headed by the former energy minister, Igor Chudinov, as Prime Minister.

On July 23, 2009 President Bakiyev was overwhelmingly re-elected with 76% of the vote, although the OSCE noted numerous voting irregularities. In October 2009, Daniyar Usenov was nominated as Prime Minister.

GOVERNMENT AND POLITICAL CONDITIONS
The 1993 constitution defines the form of government as a democratic republic. The executive branch includes a president and prime minister. The judicial branch comprises a Supreme Court, a Constitutional Court, local courts, and a Procurator-General. The legislative branch is composed of a 90-member unicameral parliament.

President Bakiyev made constitutional reform a key element of his campaign in 2005, and the November 2006 protests stemmed in part from members of parliament's demands for action on that reform. Following parliamentary elections in December 2007, President Bakiyev announced that political reform was complete and that the government would focus on economic growth and privatization.

Principal Government Officials
President--Kurmanbek Bakiyev
Minister of Foreign Affairs--Kadyrbek Sarbayev
Ambassador to the U.S.--Zamira Sydykova

The Kyrgyz Republic maintains an embassy in the United States at 2360 Massachusetts Ave, NW, Washington, DC 20008 (tel.: (202) 338-5141; fax: (202) 386-7550).

ECONOMY
Despite the backing of major Western donors, including the International Monetary Fund (IMF), the Kyrgyz Republic has had economic difficulties following independence. Initially, these were a result of the breakup of the Soviet trading bloc and resulting loss of markets, which impeded the republic's transition to a free market economy. The government has reduced expenditures, ended most price subsidies, and introduced a value-added tax. Overall, the government appears committed to the transition to a market economy. Through economic stabilization and reform, the government seeks to establish a pattern of long-term consistent growth. Reforms led to the Kyrgyz Republic's accession to the World Trade Organization (WTO) on December 20, 1998.

The Kyrgyz Republic's economy was severely affected by the collapse of the Soviet Union and the resulting loss of its vast market. In 1990, some 98% of Kyrgyz exports went to other parts of the Soviet Union. Thus, the nation's economic performance in the early 1990s was worse than any other former Soviet republic except war-torn Armenia, Azerbaijan, and Tajikistan. While economic performance has improved in the last few years, difficulties remain in securing adequate fiscal revenues and providing a sufficient social safety net.

Agriculture is an important sector of the economy in the Kyrgyz Republic. By the early 1990s, the private agricultural sector provided between one-third and one-half of some harvests. In 2002 agriculture accounted for 35.6% of GDP and about half of employment. The Kyrgyz Republic's terrain is mountainous, which accommodates livestock raising, the largest agricultural activity. Main crops include wheat, sugar beets, cotton, tobacco, vegetables, and fruit. Wool, meat, and dairy products also are major commodities.

Agricultural processing is a key component of the industrial economy, as well as one of the most attractive sectors for foreign investment. The Kyrgyz Republic is rich in mineral resources but has negligible petroleum and natural gas reserves; it imports petroleum and gas. Among its mineral reserves are substantial deposits of coal, gold, uranium, antimony, and other rare-earth metals. The government hopes to attract foreign investment in mining and metallurgy, but local business conditions are very challenging to most companies. The Kyrgyz Republic's plentiful water resources and mountainous terrain enable it to produce and export large quantities of hydroelectric energy.

The Kyrgyz Republic's principal exports are nonferrous metals and minerals, woolen goods and other agricultural products, electric energy, and certain engineering goods. Its imports include petroleum and natural gas, ferrous metals, chemicals, most machinery, wood and paper products, some foods, and some construction materials. Its leading trade partners include Switzerland, Russia, China, and neighboring Kazakhstan and Uzbekistan.

The Kyrgyz Republic exports antimony, mercury, rare-earth metals, and chemical products to the United States. It imports grain, medicine and medical equipment, vegetable oil, paper products, rice, machinery, agricultural equipment, and meat from the United States. In 2008 Kyrgyz exports to the U.S. totaled $2.5 million; 2008 Kyrgyz imports from the U.S. totaled $44.3 million, much of which was equipment, food products, and commodities provided by assistance programs.

FOREIGN RELATIONS
The Kyrgyz Republic maintains close relations with other former Soviet countries, particularly with Kazakhstan and Russia. Recognizing Russia's concerns about the Russian-speaking minority in the Kyrgyz Republic, President Akayev was sensitive to potential perceptions of discrimination. For example, although the 1993 constitution designates Kyrgyz as the state language, an amendment to the constitution in 2001 granted official status to the Russian language. The amended December 30, 2006 constitution reaffirmed the status of the two languages.

While the Kyrgyz Republic initially remained in the ruble zone, stringent conditions set by the Russian Government prompted the Kyrgyz Republic to introduce its own currency, the som, in May 1993. Withdrawal from the ruble zone was done with little prior notification and initially caused tensions in the region. Both Kazakhstan and Uzbekistan temporarily suspended trade, and Uzbekistan even introduced restrictions tantamount to economic sanctions. Both nations feared an influx of rubles and an increase in inflation. Uzbekistan and Kazakhstan's hostility toward the Kyrgyz Republic was short-lived, and the three nations signed an agreement in January 1994 creating an economic union. Economic cooperation within the region, though, is still hampered by unilateral barriers created by the Kyrgyz Republic's neighbors. The Kyrgyz Republic has been active in furthering regional cooperation, such as joint military exercises with Uzbek and Kazakh troops.

Turkey has sought to capitalize on its cultural and ethnic links to the region and has found the Kyrgyz Republic receptive to cultivating bilateral relations. The Kyrgyz Republic is a member of the OSCE, the CIS, the Shanghai Cooperation Organization (SCO), the WTO, and the United Nations.

Since December 2001, the Kyrgyz Republic has hosted Manas Transit Center, an important logistical hub for the coalition effort in Afghanistan.

U.S.-KYRGYZ RELATIONS
The U.S. Government provides humanitarian assistance, non-lethal military assistance, and assistance to support economic and political reforms. It also has supported the Kyrgyz Republic's requests for assistance from international organizations.

The United States helped the Kyrgyz Republic accede to the WTO in December 1998. U.S. assistance aids the Kyrgyz Republic in implementing necessary economic, health sector, and educational reforms, and supports economic development and conflict resolution in the Ferghana Valley.

[Also see fact sheet on FY 2008 U.S. assistance to Kyrgyz Republic.]

Principal U.S. Officials
Ambassador--Tatiana Gfoeller
Deputy Chief of Mission--Larry Memmott
Political-Economic Officer--David McCormick
Management Officer--Patrick Fenning
USAID Director--Patricia Shapiro

The U.S. Embassy in the Kyrgyz Republic is located at 171 Prospect Mira 720016 Bishkek (tel.: 996-312-55-12-41; fax: 996-312-55-12-64).
 

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Belize

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May 2, 2011Bureau of Western Hemisphere Affairs

Background Note: Belize



Official Name: Belize



PROFILE

Geography
Area: 22,966 sq. km. (8,867 sq. mi.); slightly larger than Massachusetts.
Cities: Capital--Belmopan (2011 pop. est. 13,654). Other cities and towns--Belize City (53,532), Corozal (9,871), Orange Walk (13,400), San Ignacio and Santa Elena (16,977), Dangriga (9,096), Punta Gorda (5,205), and San Pedro (11,510).
Terrain: Flat and swampy coastline, low mountains in interior.
Climate: Subtropical (dry and wet seasons). Hot and humid. Rainfall ranges from 60 inches in the north to 200 inches in the south annually.

People
Nationality: Noun and adjective--Belizean(s).
Population (May 2010): 312,971.
Annual population growth rate (2010 est.): 2.65%.
Ethnic groups: Creole, Garifuna, mestizo, Mayan.
Religions: Roman Catholic, Anglican, Methodist, Mennonite, other Protestant, Muslim, Hindu, and Buddhist.
Languages: English (official), Creole, Spanish, Garifuna, Mayan.
Education: Years compulsory--9. Attendance (2006 est.)--90% primary; 38% secondary. Literacy (2006 est.)--76.5%.
Health (2009): Infant mortality rate--23.07/1,000 live births. Life expectancy--68.2 years.
Work force (2009, 122,300): Services; agriculture, hunting, forestry, and fishing; industry and commerce.

Government
Type: Parliamentary democracy.
Independence: September 21, 1981.
Constitution: September 21, 1981.
Branches: Executive--Queen Elizabeth II (head of state), represented by a governor general; prime minister (head of government, 5-year term). Legislative--bicameral National Assembly. Judicial--Court of Appeal, Supreme Court, district magistrates.
Subdivisions: Six districts.
Political parties: United Democratic Party (UDP), People's United Party (PUP), National Alliance for Belizean Rights (NABR), National Reform Party (NRP), Vision Inspired By the People (VIP), People's National Party (PNP), We the People Reform Movement (WTP).
Suffrage: Universal adult.

Economy
GDP (current market prices, 2010): $1.36 billion.
Real annual growth rate: 2.4% (2010); -1.5% (2009).
Per capita income (2009): $8,097.
Avg. inflation rate (2010): 1.8%.
Natural resources: Arable land, timber, seafood, minerals.
Primary sectors (10.2% of GDP, 2009): Agriculture, forestry, fishing, petroleum, and mining.
Secondary sectors (18.1% of GDP, 2009): Manufacturing, electricity and water supply, and construction.
Tertiary sectors (54.1% of GDP, 2009): Hotels and restaurants, financial intermediation, trade, and transport and communication.
Trade: Exports (2009)--$250.5 million: cane sugar, citrus concentrate, marine products, bananas, clothing, molasses, and crude oil. Major markets--U.S. (36.9%), U.K., CARICOM. Imports (2009)--$668.1 million: food, consumer goods, machinery and transportation equipment, chemicals, pharmaceuticals, tobacco, mineral fuels, and lubricants. Major suppliers--U.S. (38%), Central America, Mexico, and China.
Official exchange rate: Since 1976 Belizean banks have bought U.S. dollars at the rate of 2.0175 and sold them at 1.9825, making for an effective fixed rate of Belize $2=U.S. $1.

PEOPLE
Belize is the most sparsely populated nation in Central America. It is larger than El Salvador and compares in size to the State of Massachusetts. Slightly more than half of the population lives in rural areas. About one-fifth live in Belize City, the principal port, commercial center, and former capital. More than one-third of the population is comprised of persons younger than 14 years of age.

Most Belizeans are of multiracial descent. About 43.7% of the population is of mixed Mayan and European descent (mestizo); 29.8% are of African and Afro-European (Creole) ancestry; about 11.0% are Mayan; and about 6.6% are Afro-Amerindian (Garifuna). The remainder, about 8.9%, includes European, East Indian, Chinese, Middle Eastern, and North American groups.

English, the official language, is spoken by virtually all except the refugees who arrived during the past decades. Spanish is the native tongue of about 50% of the people and is spoken as a second language by another 20%. The various Mayan groups still speak their indigenous languages, and an English-Creole dialect similar to the Creole dialects of the English-speaking Caribbean Islands is spoken by most. The rate of functional literacy is 76%. About 50% of the population is Roman Catholic; the Anglican Church and other Protestant Christian groups account for most of the remaining 50%. Mennonite settlers number about 8,500.

HISTORY
The Mayan civilization spread into the area of Belize between 1500 BC and AD 300 and flourished until about AD 1200. Several major archeological sites--notably Caracol, Lamanai, Lubaantun, Altun Ha, and Xunantunich--reflect the advanced civilization and much denser population of that period. European contact began in 1502 when Christopher Columbus sailed along the coast. The first recorded European settlement was established by shipwrecked English seamen in 1638. Over the next 150 years, more English settlements were established. This period also was marked by piracy, indiscriminate logging, and sporadic attacks by Indians and neighboring Spanish settlers.

Great Britain first sent an official representative to the area in the late 18th century, but Belize was not formally termed the "Colony of British Honduras" until 1840. It became a crown colony in 1862. Subsequently, several constitutional changes were enacted to expand representative government. Full internal self-government under a ministerial system was granted in January 1964. The official name of the territory was changed from British Honduras to Belize in June 1973, and full independence was granted on September 21, 1981.

GOVERNMENT
Belize is a parliamentary democracy based on the Westminster model and is a member of the Commonwealth. Queen Elizabeth II is head of state and is represented in the country by Governor General Colville N. Young, Sr., a Belizean and Belize's second governor general. The primary executive organ of government is the cabinet, led by a prime minister (head of government). Cabinet ministers are members of the majority political party in parliament and usually hold elected seats in the National Assembly concurrently with their cabinet positions.

The National Assembly consists of a House of Representatives and a Senate. The 31 members of the House are popularly elected to a maximum 5-year term. The governor general appoints the Senate's 12 members. Six are appointed in accordance with the advice of the prime minister, 3 with the advice of the leader of the opposition. The Belize Council of Churches and the Evangelical Association of Churches, the Belize Chamber of Commerce and Industry and the Belize Business Bureau, and the National Trade Union Congress and the Civil Society Steering Committee each advise the Governor General on the appointment of one senator each. (A majority of Belizeans who decided to participate in the referendum held along with the national elections on February 7, 2008 voted in favor of a change from the current appointed Senate to an elected one. This change will take effect during the next general election, which is slated to take place by early 2013.) The Senate is headed by a president, who is a non-voting member appointed by the governing party.

Members of the independent judiciary are appointed. The judicial system includes local magistrates, the Supreme Court, and the Court of Appeal. In 2001 Belize joined with most members of the Caribbean Common Market (CARICOM) to establish a "Caribbean Court of Justice," which was inaugurated on April 16, 2005. In June 2010, the Belizean Government made the Caribbean Court of Justice the highest court for Belize, replacing the Privy Council in London. The country is divided into six districts: Corozal, Orange Walk, Belize, Cayo, Stann Creek, and Toledo.

POLITICAL CONDITIONS
In national elections on February 7, 2008, the United Democratic Party (UDP) prevailed over the incumbent People's United Party (PUP). The UDP won 25 of the 31 seats in the House of Representatives, while the PUP won the other six seats. UDP leader Dean Barrow replaced PUP leader Said Musa as Prime Minister. The PUP governed Belize from 1998-2008; the UDP from 1993-98; the PUP from 1989-1993; and the UDP from 1984-89. Before 1984, the PUP had dominated the electoral scene for more than 30 years and was the party in power when Belize became independent in 1981. Third-party alternatives to the two-party system have arisen in the recent years, but these parties garnered less than 2% of the vote in the February 2008 elections.

The UDP is responding to concerns of an unsustainable foreign debt, high unemployment, growing involvement in the South American drug trade, high crime rates, and increasing incidents of HIV/AIDS through a four-pillar approach: social investment through poverty alleviation; job creation through public sector investment; improving access to credit; and combating crime and violence. As of March 2011, Belize’s total national debt (both external and domestic) was U.S. $1.0156 billion, an amount equivalent to approximately 75.3% of GDP. On January 31, 2007 the Government of Belize officially announced that the holders of Belize's public external commercial debt had agreed to exchange their existing claims against the country for new bonds to be issued by Belize, maturing in 2029.

Belize traditionally maintains a deep interest in the environment and sustainable development. In August 2001, the governments of the U.S. and Belize, in conjunction with The Nature Conservancy, announced a debt-for-nature swap under the Tropical Forest Conservation Act. The $5.5 million in appropriated funds were combined with $1.3 million in private funds raised by The Nature Conservancy to reduce Belize’s official debt to the U.S. by half. Under the agreement, the Government of Belize issued obligations to generate approximately $9 million in local currency payments to help a consortium of four local non-governmental organizations (NGOs) administer conservation activities in protected areas. On other fronts, the government is working to improve its law enforcement capabilities. A longstanding territorial dispute with Guatemala continues, although cooperation between the two countries has increased in recent years across a wide spectrum of common interests, including trade and environment. Seeing itself as a bridge, Belize is actively involved with the Caribbean nations of CARICOM, works with its Central American neighbors as a member of SICA (Central American Integration System), and participates in the Organization of American States.

Principal Government Officials
Head of State--Queen Elizabeth II
Governor General--Colville N. Young, Sr.
Prime Minister and Minister of Finance--Dean Barrow
Deputy Prime Minister and Minister of Natural Resources and the Environment--Gaspar Vega
Minister of Economic Development, Commerce, Industry and Consumer Protection--Erwin Contreras
Minister of Foreign Affairs and Foreign Trade--Wilfred Elrington
Minister of Defense--Carlos Perdomo
Minister of Police--Douglas Singh
Minister of Tourism and Civil Aviation--Manuel Heredia
Minister of Housing and Urban Development--Michael Finnegan
Minister of Education--Patrick Faber
Minister of Emergency Management, Transport and Communications--Melvin Hulse

Ambassador to the United States--Nestor Mendez
Ambassador to the OAS--Nestor Mendez
Ambassador to the United Nations--Janine Coye-Felson

Belize maintains an embassy in the United States at 2535 Massachusetts Avenue NW, Washington, DC 20008 (tel: 202-332-9636; fax: 202-332-6888; website: http://www.embassyofbelize.org/) and a consulate in Los Angeles. Belize travel information office in New York City: 800-624-0686.

ECONOMY
Forestry was the only economic activity of any consequence in Belize until well into the 20th century, when the supply of accessible timber began to dwindle. Cane sugar then became the principal export. Exports were augmented by expanded production of citrus, bananas, seafood, and apparel. The agricultural sector suffered from damage caused by hurricanes that struck Belize in late 2007 and late 2010 and heavy flooding in mid-June and October of 2008. The farmed shrimp industry, a chief export earner until 2005, continues to decline.

Belize was adversely impacted by the global downturn in 2009, but the economy recovered modestly in 2010. GDP growth reached 2.4% during 2010, supported by government services and commerce. However, Belize's economic performance is highly susceptible to external market changes. Tourism is Beilze’s number one foreign exchange earner, followed by exports of crude oil, marine products, citrus, sugar, bananas, and garments. Because of the uncertain future of these traditional exports, efforts are being made toward agricultural diversification. Agriculture currently provides some 71% of the country's total foreign exchange earnings and employs approximately 29% of the total labor force.

Although about 1,998,230 acres (or 38% of the total land area) are considered potentially suitable for agricultural use, only approximately 10% to 15% is in use in any one year. About half of this is under pasture, with the remainder in a variety of permanent and annual crops. The traditional system of "milpa" (shifting cultivation) involves the annual clearing of new land for crop production; however, increasing numbers of farmers are making permanent use of cleared land by mechanical means. A tax is levied on the unimproved "value" of the land. To curb land speculation, the government enacted legislation in 1973 that requires non-Belizeans to complete a development plan on land they purchase before obtaining title to plots of more than 10 acres of rural land or more than one-half acre of urban land.

Domestic industry is limited, constrained by relatively high-cost labor and energy and a small domestic market. Some 185 U.S. companies have operations in Belize, including Archer Daniels Midland and Texaco. Tourism attracts the most foreign direct investment, although U.S. investment also is found in the telecommunications and agricultural sectors.

A combination of natural factors--climate, the longest barrier reef in the Western Hemisphere, numerous islands, excellent fishing, safe waters for boating, jungle wildlife, and Mayan ruins--support the thriving tourist industry. The Government of Belize has designated tourism as one of its major development priorities.

Belize’s banking system has reported a surge in nonperforming loans (NPLs), equivalent to 20% of total loans in mid-2010. While banks comply with current regulations, provisioning remains low by international standards, covering less than 16% of NPLs. The increase in NPLs has been largely concentrated in three banks (two domestic banks and one offshore), which account for over 40% of deposits in the banking system.

Belize's investment policy is codified in the Belize Investment Guide, which sets out the development priorities for the country. A Country Commercial Guide for Belize is available from the U.S. Embassy's Economic/Commercial section and on the Internet at: http://belize.usembassy.gov/investing_in_belize2.html.

Infrastructure
A major constraint on the economic development of Belize continues to be the scarcity of infrastructure investments. As part of its financial austerity measures started in late 2004, the government froze expenditures on several capital projects. Although electricity, telephone, and water utilities are all relatively good, Belize has the most expensive electricity in the region. Hydroelectric facilities at Vaca Dam and a bagasse cogeneration plant at a sugar cane processing facility were brought fully online in 2010 in an effort to increase domestic capacity for electricity generation. Large tracts of land, which would be suitable for development, are inaccessible due to lack of roads. Some roads, including sections of major highways, are subject to damage or closure during the rainy season. Ports in Belize City, Dangriga, and Big Creek handle regularly scheduled shipping from the United States and the United Kingdom, although draft is limited to a maximum of 10 feet in Belize City and 15 feet in southern ports. American Airlines, Continental Airlines, U.S. Air, Delta Airlines, and TACA provide international air service to gateways in Dallas, Houston, Miami, Charlotte, Atlanta, and San Salvador.

Trade
Belize continues to rely heavily on foreign trade. World commodity price fluctuations and preferential trading agreements, especially with the United States and the European Union (cane sugar) and the United Kingdom (bananas), greatly impact Belize's economic performance. European Union (EU) and U.K. preferences have been vital for the expansion and prosperity of the sugar and banana industries. U.S. trade preferences allowing for duty-free re-import of finished apparel cut from U.S. textiles have significantly expanded the apparel industry.

Imports for 2009 totaled $668.1 million, while total exports were $250.5 million. The United States continues to be Belize's number-one trading partner. Through 2009, the United States provided 38.0% of all Belizean imports and accounted for 37% of Belize's total exports. Other major trading partners include Mexico, the United Kingdom, the European Union, Central America, and the CARICOM member states. Belize aims to stimulate the growth of commercial agriculture through CARICOM. However, Belizean trade with the rest of the Caribbean is small compared to that with the United States and Europe.

NATIONAL SECURITY
In June 2010, Prime Minister Dean Barrow announced changes to his cabinet. The Ministry of National Security was split into the Ministry of Defense and Ministry of Police and Public Security. This included the addition of two new members of cabinet and the division of one ministry. The Belize Defense Force (BDF), established in January 1973, is comprised of a light infantry force of regulars and reservists along with small air and maritime wings. The BDF, currently under the command of Brigadier General Dario Tapia, assumed total defense responsibility from British Forces Belize (BFB) on January 1, 1994. In late 2010, the British Ministry of Defense announced plans to close down its base in Belize as part of cost-saving measures and reduced its troops from 70 soldiers to a skeleton staff of fewer than 10 soldiers. The BDF receives military assistance from the United States.

FOREIGN RELATIONS
Belize's principal external concern has been the dispute involving the Guatemalan claim to Belizean territory. This dispute originated in Imperial Spain's claim to all "New World" territories west of the line established in the Treaty of Tordesillas in 1494. Nineteenth-century efforts to resolve the problems led to later differences over interpretation and implementation of an 1859 treaty intended to establish the boundaries between Guatemala and Belize, then named British Honduras. Guatemala contends that the 1859 treaty is void because the British failed to comply with all its economic assistance clauses. Neither Spain nor Guatemala ever exercised effective sovereignty over the area.

Negotiations have been underway for many years, including one period in the 1960s in which the U.S. Government sought unsuccessfully to mediate. A 1981 trilateral (Belize, Guatemala, and the United Kingdom) "Heads of Agreement" was not implemented due to continued contentions. Belize became independent on September 21, 1981, with the territorial dispute unresolved. Significant negotiations between Belize and Guatemala, with the United Kingdom as an observer, resumed in 1988. Guatemala recognized Belize's independence in 1991, and diplomatic relations were established.

Eventually, on November 8, 2000, the two parties agreed to respect an "adjacency zone" extending one kilometer east and west from the border. Around this time, the Government of Guatemala insisted that the territorial claim was a legal one and that the only possibility for a resolution was to submit the case to the International Court of Justice (ICJ). However, the Government of Belize felt that taking the case to the ICJ or to arbitration represented an unnecessary expenditure of time and money. So the Belizean Government proposed an alternate process, one under the auspices of the Organization of American States (OAS).

Since then, despite efforts by the OAS to jumpstart the process, movement has been limited to confidence-building measures between the parties. In November 2007, the Secretary General of the OAS recommended that the dispute be referred to the ICJ. Currently Belize and Guatemala are preparing for a referendum, to be held simultaneously in both countries, on whether this dispute will move forward to the ICJ. No date for the referendum has been set.

In order to strengthen its potential for economic and political development, Belize has sought to build closer ties with the Spanish-speaking countries of Central America to complement its historical ties to the English-speaking Caribbean states. In 2005 Belize joined other Central American countries participating in the Cooperating Nations Information Exchange System (CNIES), which assists in locating, identifying, tracking, and intercepting civil aircraft in Belize's airspace. Belize and other Central American countries signed the Conjunta Centroamerica-USA (CONCAUSA) agreement on regional sustainable development. Belize held the presidency of the Central American Integration System (SICA) for a 6-month period in 2010. Belize is a member of CARICOM, which was founded in 1973, and held the chairmanship of CARICOM for a 6-month period in 2008. Belize became an OAS member in 1990.

U.S.-BELIZEAN RELATIONS
The United States and Belize traditionally have had close and cordial relations. The United States is Belize's principal trading partner and major source of investment funds. It is also home to the largest Belizean community outside Belize, estimated to be 70,000 strong. Belize's economic growth and accompanying democratic political stability are important U.S. objectives.

International crime issues dominate the agenda of bilateral relations between the United States and Belize. The United States is working closely with the Government of Belize to fight illicit narcotics trafficking, and Belize benefits from the Central America Regional Security Initiative (CARSI). Through CARSI, the U.S. Government seeks to strengthen citizen safety and improve the government’s capacity to confront and disrupt criminal organizations. Both governments also seek to control the flow of illegal migrants to the United States through Belize. Belize and the United States brought into force a Stolen Vehicle Treaty, an Extradition Treaty, and a Mutual Legal Assistance Treaty between 2001 and 2003.

The United States is one of the largest providers of economic assistance to Belize, contributing $3.5 million in various bilateral economic and military aid programs to Belize in FY 2008. The U.S. military has a diverse and growing assistance program in Belize that has included the construction and renovation of several schools and youth hostels, medical assistance programs, and drug reduction programs. The U.S. Military Liaison Office (MLO), in conjunction with the Belize Defense Force, also worked to establish the Belize National Coast Guard. The U.S. Agency for International Development (USAID) closed its Belize office in August 1996 after a 13-year program during which USAID provided $110 million worth of development assistance to Belize. Belize still benefits from USAID regional programs. In addition, during the past 42 years, almost 2,000 Peace Corps volunteers have served in Belize. As of October 2010, the Peace Corps had 75 volunteers working in Belize.

Principal U.S. Officials
Ambassador--Vinai Thummalapally
Deputy Chief of Mission--J.A. Diffily
Economic/Political Officer--Joseph Boski
Political Officer--Jennifer Barr
Consul--Arlene Grace Genuino
Management Officer--Philip Wilson
Military Liaison Officer--LTC Chris Eldridge

The U.S. Embassy is located in the City of Belmopan on Floral Park Street. The mailing address is P.O. Box 497, Belmopan, Cayo District, Belize, Central America: tel: 011-501- 822-4011 from the United States or 822-4011 locally; fax: 011-501-822-4012 Main number; 822-4053 Administrative Office; 822-4050 Consular Section. E-mail address: embbelize@state.gov, Web site address: http://belize.usembassy.gov/.

Other useful contacts
Caribbean/Latin American Action
1818 N Street, NW
Washington, DC 20036
Tel: 202-466-7464
Fax: 202-822-0075

U.S. Department of Commerce
International Trade Administration
Office of Latin American and the Caribbean
14th and Constitution, NW
Washington, DC 20230
Tel: 202-482-1658; 202-USA-TRADE
Fax: 202-482-0464

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : North Korea

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April 29, 2011Bureau of East Asian and Pacific Affairs

Background Note: North Korea



Official Name: Democratic People's Republic of Korea



PROFILE

Geography
Area: 122,762 sq. km. (47,918 sq. mi.), about the size of Mississippi.
Cities: Capital--Pyongyang. Other cities--Hamhung, Chongjin, Wonsan, Nampo, Sinjuiju, and Kaesong.
Terrain: About 80% of land area is moderately high mountains separated by deep, narrow valleys and small, cultivated plains. The remainder is lowland plains covering small, scattered areas.
Climate: Long, cold, dry winters; short, hot, humid, summers.

People*
Nationality: Noun and adjective--Korean(s).
Population (July 2011 est., CIA World Factbook): 25.5 million.
Annual population growth rate: About +0.42%.
Ethnic groups: Korean; small ethnic Chinese and Japanese populations.
Religions: Autonomous religious activities have been virtually nonexistent since 1945. Buddhism, Confucianism, Shamanism, Chongdogyo, and Christianity existed previously and have influenced the country.
Language: Korean.
Education: Years compulsory--11. Attendance--3 million (primary, 1.5 million; secondary, 1.2 million; tertiary, 0.3 million). Literacy--99%.
Health (1998): Medical treatment is free; one doctor for every 700 inhabitants; one hospital bed for every 350; there are severe shortages of medicines and medical equipment. Infant mortality rate--47/1,000 (2010 est., UN Population Fund--UNFPA). Life expectancy--males 65.5 yrs., females 69.7 yrs. (2010 est., UNFPA).

Government
Type: Highly centralized communist state.
Independence: August 15, 1945--Korean liberation from Japan; September 9, 1948--establishment of the Democratic People's Republic of Korea (D.P.R.K., or North Korea), marking its separation from the Republic of Korea (R.O.K., or South Korea).
Constitution: 1948; revised in 1972, 1992, 1998, and 2009.
Branches: Executive--President of the Presidium of the Supreme People's Assembly (chief of state); Chairman of the National Defense Commission (head of government). Legislative--Supreme People's Assembly. Judicial--Central Court; provincial, city, county, and military courts.
Subdivisions: Nine provinces; two province-level municipalities (Pyongyang, Nasun, also known as Najin-Sonbong free trade zone); one special city (Nampo), 24 cities.
Political party: Korean Workers' Party (Communist).
Suffrage: Universal at 17.

Economy*
GDP (2009 est., CIA World Factbook): $28 billion; 46.9% in industry, 32.1% in services, 20.9% in agriculture.
Per capita GDP, purchasing power parity (2009 est., CIA World Factbook): $1,800.
Agriculture: Products--rice, corn, potatoes, soybeans, cattle, pigs, pork, and eggs.
Mining and manufacturing: Types--military products, machine building, electric power, chemicals, mining (coal, iron ore, limestone, magnesite, graphite, copper, zinc, lead, and precious metals), metallurgy, textiles, food processing, tourism.
Trade (2009): Exports--$1.997 billion (CIA World Factbook): minerals, metallurgical products, manufactures (including armaments), textiles, agricultural and fishery products. The D.P.R.K. is also thought to earn hundreds of millions of dollars from the unreported sale of missiles, narcotics, and counterfeit cigarettes and currency, and other illicit activities. Imports--$3.096 billion: petroleum, coking coal, machinery and equipment, textiles, grain.
Major trading partners (2009): (1) China, (2) R.O.K., (3) Singapore, and (4) India.

*In most cases, the figures used above are estimates based upon incomplete data and projections.

HISTORICAL AND CULTURAL HIGHLIGHTS
The Korean Peninsula was first populated by peoples of a Tungusic branch of the Ural-Altaic language family, who migrated from the northwestern regions of Asia. Some of these peoples also populated parts of northeast China (Manchuria); Koreans and Manchurians still show physical similarities. Koreans are racially and linguistically homogeneous. Although there are no indigenous minorities in North Korea, there is a small Chinese community (about 50,000) and some 1,800 Japanese wives who accompanied the roughly 93,000 ethnic Koreans returning to the North from Japan between 1959 and 1962. Although dialects exist, the Korean language spoken throughout the peninsula is mutually comprehensible. In North Korea, the Korean alphabet (hangul) is used exclusively.

Korea's traditional religions are Buddhism and Shamanism. Christian missionaries arrived as early as the 16th century, but it was not until the 19th century that major missionary activity began. Pyongyang was a center of missionary activity, and there was a relatively large Christian population in the north before 1945. Although religious groups exist in North Korea today, the government severely restricts religious activity.

By the first century AD, the Korean Peninsula was divided into the kingdoms of Shilla, Koguryo, and Paekche. In 668 AD, the Shilla kingdom unified the peninsula. The Koryo dynasty--from which Portuguese missionaries in the 16th century derived the Western name "Korea"--succeeded the Shilla kingdom in 935. The Choson dynasty, ruled by members of the Yi clan, supplanted Koryo in 1392 and lasted until Japan annexed Korea in 1910.

Throughout its history, Korea has been invaded, influenced, and fought over by its larger neighbors. Korea was under Mongolian occupation from 1231 until the early 14th century. The unifier of Japan, Hideyoshi Toyotomi, launched major invasions of Korea in 1592 and 1597. When Western powers focused "gunboat" diplomacy on Korea in the mid-19th century, Korea's rulers adopted a closed-door policy, earning Korea the title of "Hermit Kingdom." Although the Choson dynasty recognized China's hegemony in East Asia, Korea was independent until the late 19th century. At that time, China sought to block growing Japanese influence on the Korean Peninsula and Russian pressure for commercial gains there. The competition produced the Sino-Japanese War of 1894-95 and the Russo-Japanese War of 1904-05. Japan emerged victorious from both wars and in 1910 annexed Korea as part of the growing Japanese empire. Japanese colonial administration was characterized by tight control from Tokyo and ruthless efforts to supplant Korean language and culture. Organized Korean resistance during the colonial era was generally unsuccessful, and Japan remained firmly in control of the Peninsula until the end of World War II in 1945. The surrender of Japan in August 1945 led to the immediate division of Korea into two occupation zones, with the United States administering the area south of the 38th parallel, and the Soviet Union administering the area to the north of the 38th parallel. This division was meant to be temporary until the United States, United Kingdom, Soviet Union, and China could arrange a trusteeship administration.

In December 1945, a conference was convened in Moscow to discuss the future of Korea. A 5-year trusteeship was discussed, and a joint Soviet-American commission was established. The commission met intermittently in Seoul but deadlocked over the issue of establishing a national government. In September 1947, with no solution in sight, the United States submitted the Korean question to the UN General Assembly. Initial hopes for a unified, independent Korea quickly evaporated as the politics of the Cold War and domestic opposition to the trusteeship plan resulted in the 1948 establishment of two separate nations with diametrically opposed political, economic, and social systems. Elections were held in the South under UN observation, and on August 15, 1948, the Republic of Korea (R.O.K.) was established in the South. Syngman Rhee, a nationalist leader, became the Republic's first president. On September 9, 1948, the North established the Democratic People's Republic of Korea (D.P.R.K.) headed by then-Premier Kim Il-sung, who had been cultivated and supported by the Soviet Union.

Korean War of 1950-53
Almost immediately after the establishment of the D.P.R.K., guerrilla warfare, border clashes, and naval battles erupted between the two Koreas. North Korean forces launched a massive surprise attack and invaded South Korea on June 25, 1950. The United Nations, in accordance with the terms of its charter, engaged in its first collective action and established the UN Command (UNC), to which 16 member nations sent troops and assistance. Next to South Korea, the United States contributed the largest contingent of forces to this international effort. The battle line fluctuated north and south, and after large numbers of Chinese "People's Volunteers" intervened to assist the North, the battle line stabilized north of Seoul near the 38th parallel.

Armistice negotiations began in July 1951, but hostilities continued until July 27, 1953. On that date, at Panmunjom, the military commanders of the North Korean People's Army, the Chinese People's Volunteers, and the UNC signed an armistice agreement. Neither the United States nor South Korea is a signatory to the armistice per se, although both adhere to it through the UNC. No comprehensive peace agreement has replaced the 1953 armistice pact.

GOVERNMENT AND POLITICAL CONDITIONS
North Korea has a centralized government under the rigid control of the communist Korean Workers' Party (KWP), to which all government officials belong. A few minor political parties are allowed to exist in name only. Kim Il-sung ruled North Korea from 1948 until his death in July 1994 as Secretary General of the KWP and President of North Korea. The latter post was abolished following Kim Il-sung’s death and the title of the Eternal President of the Republic was established and given to Kim Il-sung.

Little is known about the actual lines of power and authority in the North Korean Government despite the formal structure set forth in its constitution. Following the death of Kim Il-sung, his son, Kim Jong-il, inherited supreme power. Kim Jong-il was named General Secretary of the KWP in October 1997, and in September 1998, the Supreme People's Assembly (SPA) reconfirmed Kim Jong-il as Chairman of the National Defense Commission (NDC) and declared that position as the "highest office of state." However, the President of the Presidium of the SPA, Kim Yong-nam, serves as the nominal head of state. North Korea's 1972 constitution was amended in late 1992, September 1998, and April 2009.

Three key entities control the government of the D.P.R.K. The cabinet, formerly known as the State Administration Council (SAC), administers the ministries and has a significant role in implementing policy. The cabinet is headed by the premier and is the dominant administrative and executive agency. The NDC is responsible for external and internal security, and under the leadership of Kim Jong-il the NDC has assumed a significant role in influencing policy. The Politburo of the Central People’s Committee is the top policymaking body of the KWP, which also plays a role as the dominant social institution in North Korea.

Officially, the D.P.R.K.’s legislature, the Supreme People’s Assembly, is the highest organ of state power. Its members are elected every 4 years. Usually only two meetings are held annually, each lasting a few days. A standing committee elected by the SPA performs legislative functions when the Assembly is not in session. In reality, the SPA serves only to ratify decisions made by the ruling KWP.

North Korea's judiciary is "accountable" to the SPA and the president. The SPA's standing committee also appoints judges to the highest court for 4-year terms that are concurrent with those of the Assembly.

Administratively, North Korea is divided into nine provinces and two provincial-level municipalities--Pyongyang and Nasun (also known as Najin-Sonbong). It also appears to be divided into nine military districts.

Principal Party and Government Officials
Kim Jong-il--General Secretary of the KWP; Supreme Commander of the People's Armed Forces; Chairman of the NDC; son of North Korea's founder Kim Il-sung
Kim Yong-nam--President of the Presidium of the Supreme People's Assembly; titular head of state
Han Song-ryol--Ambassador to the D.P.R.K. Permanent Mission to the UN
Pak Ui-chun--Minister of Foreign Affairs
Kim Jong-un--General of the People’s Armed Forces, Vice-Chairman Central Military Commission; son of Kim Jong-Il

Human Rights
Due to its isolationist nature, North Korea’s human rights record is difficult to evaluate. However, non-governmental organizations (NGOs), think tanks, and defectors continue to report that North Korea maintains a record of consistent, severe human rights violations, stemming from the government’s total control over all activity. Reported human rights abuses include arbitrary and lengthy imprisonment, torture and degrading treatment, poor prison conditions (including cases of starvation), forced labor, public executions, prohibitions or severe restrictions on freedom of speech, the press, movement, assembly, religion, and privacy, denial of the right of citizens to change their government, and suppression of workers’ rights. Cases of starvation have been repeatedly documented. All sources of media, such as radio, television, and news organizations, are controlled by the government and heavily censored. Correspondence is strictly monitored and Internet use is limited to the political elite. Cellular phone access is limited to an internal network; international calls are deemed illegal except for the political elite. North Korea is ranked second to last on the World Press Freedom Index.

DEFENSE AND MILITARY ISSUES
North Korea has one of the largest armies in the world. It has an estimated active duty military force of up to 1.2 million personnel, compared to about 680,000 in the South. Military spending is estimated at as much as a quarter of GNP, with up to 20% of men ages 17-54 in the regular armed forces. North Korean forces have a substantial numerical advantage over the South (around 2 to 1) in several key categories of offensive weapons--tanks, long-range artillery, and armored personnel carriers. The North has one of the world's largest special operations forces, designed for insertion behind the lines in wartime.

North Korea’s navy is primarily a coastal navy, with antiquated surface and submarine fleets. Its air force has twice the number of aircraft as the South, but, except for a few advanced fighters, the North's air force is obsolete.

The North deploys the bulk of its forces well forward, along the demilitarized zone (DMZ). Several North Korean military tunnels under the DMZ were discovered in the period from the 1970s to the present day. Over the course of several years, North Korea realigned its forces and moved some rear-echelon troops to hardened bunkers closer to the DMZ. Given the proximity of Seoul to the DMZ (some 25 miles), South Korean and U.S. forces are likely to have little warning of attack. The United States and South Korea continue to believe that the U.S. troop presence in South Korea remains an effective deterrent. North Korea's attempts to develop a nuclear weapons program has also been a source of international tension (see below, Reunification Efforts Since 1971; Denuclearization of the Korean Peninsula).

In 1953, the Military Armistice Commission (MAC) was created to oversee and enforce the terms of the armistice. North Korea has sought to dismantle the MAC in a push for a new "peace mechanism" on the peninsula. In April 1994, it declared the MAC void and withdrew its representatives.

FOREIGN RELATIONS
North Korea's relationship with the South has determined much of its post-World War II history and still undergirds much of its foreign policy. North and South Korea have had a difficult and acrimonious relationship since the Korean War. In recent years, North Korea has pursued a mixed policy--seeking to develop economic relations with South Korea and to win the support of the South Korean public for greater North-South engagement while at the same time continuing to denounce the R.O.K.'s security relationship with the United States and maintaining a threatening conventional force posture on the DMZ and in adjacent waters.

The military demarcation line (MDL) of separation between the belligerent sides at the close of the Korean War divides North Korea from South Korea. A demilitarized zone (DMZ) extends for 2,000 meters (just over 1 mile) on either side of the MDL. Both the North and South Korean governments hold that the MDL is only a temporary administrative line, not a permanent border.

During the postwar period, both Korean governments have repeatedly affirmed their desire to reunify the Korean Peninsula, but until 1971 the two governments had no direct, official communications or other contact.

Reunification Efforts Since 1971
In August 1971, North and South Korea held talks through their respective Red Cross societies with the aim of reuniting the many Korean families separated following the division of Korea and the Korean War. In July 1972, the two sides agreed to work toward peaceful reunification and an end to the hostile atmosphere prevailing on the peninsula. Officials exchanged visits, and regular communications were established through a North-South coordinating committee and the Red Cross. These initial contacts broke down in 1973 following South Korean President Park Chung-hee's announcement that the South would seek separate entry into the United Nations, and after the kidnapping of South Korean opposition leader Kim Dae-jung--perceived as friendly to unified entry into the UN--by South Korean intelligence services. There was no other significant contact between North and South Korea until 1984.

Dialogue was renewed in September 1984, when South Korea accepted the North's offer to provide relief goods to victims of severe flooding in South Korea. Red Cross talks to address the plight of separated families resumed, as did talks on economic and trade issues and parliamentary-level discussions. However, the North then unilaterally suspended all talks in January 1986, arguing that the annual U.S.-R.O.K. "Team Spirit" military exercises were inconsistent with dialogue. There was a brief flurry of negotiations that year on co-hosting the upcoming 1988 Seoul Olympics, which ended in failure and was followed by the 1987 bombing of a South Korean commercial aircraft (Korean Airlines flight 858) by North Korean agents.

In July 1988, South Korean President Roh Tae-woo called for new efforts to promote North-South exchanges, family reunification, inter-Korean trade, and contact in international forums. Roh followed up this initiative in a UN General Assembly speech in which South Korea offered for the first time to discuss security matters with the North. Initial meetings that grew out of Roh's proposals started in September 1989. In September 1990, the first of eight prime minister-level meetings between North Korean and South Korean officials took place in Seoul. The prime ministerial talks resulted in two major agreements: the Agreement on Reconciliation, Nonaggression, Exchanges, and Cooperation (the "Basic Agreement") and the Declaration on the Denuclearization of the Korean Peninsula (the "Joint Declaration").

The Basic Agreement, signed on December 13, 1991, called for reconciliation and nonaggression and established four joint commissions. These commissions--on South-North reconciliation, South-North military affairs, South-North economic exchanges and cooperation, and South-North social and cultural exchange--were to work out the specifics for implementing the Basic Agreement. Subcommittees to examine specific issues were created, and liaison offices were established in Panmunjom. However, in the fall of 1992 the process came to a halt because of rising tension over North Korea's nuclear program.

The Joint Declaration on denuclearization was initialed on December 31, 1991. It forbade both sides from testing, manufacturing, producing, receiving, possessing, storing, deploying, or using nuclear weapons and forbade the possession of nuclear reprocessing and uranium enrichment facilities. A procedure for inter-Korean inspection was to be organized, and a North-South Joint Nuclear Control Commission (JNCC) was mandated to verify the denuclearization of the peninsula.

On January 30, 1992, the D.P.R.K. finally signed a nuclear safeguards agreement with the International Atomic Energy Agency (IAEA), as it had pledged to do in 1985 when it acceded to the Nuclear Non-Proliferation Treaty (NPT). This safeguards agreement allowed IAEA inspections to begin in June 1992. In March 1992, the JNCC was established in accordance with the Joint Declaration, but subsequent meetings failed to reach agreement on the main issue of establishing a bilateral inspection regime.

As the 1990s progressed, concern over the North's attempts to develop a nuclear program became a major issue in North-South relations and between North Korea and the United States. The lack of progress on implementation of the Joint Declaration's provision for an inter-Korean nuclear inspection regime led to reinstatement of the U.S.-R.O.K. Team Spirit military exercises for 1993. The situation worsened rapidly when North Korea, in January 1993, refused IAEA access to two suspected nuclear waste sites and then announced in March 1993 its intent to withdraw from the NPT. During the next 2 years, the United States held direct talks with the D.P.R.K. that resulted in a series of agreements on nuclear matters, including the 1994 Agreed Framework (which broke down in 2002 when North Korea was discovered to be pursuing a uranium enrichment program for nuclear weapons--see below, Denuclearization of the Korean Peninsula).

At his inauguration in February 1998, R.O.K. President Kim Dae-jung enunciated a new policy of engagement with the D.P.R.K., named "the Sunshine Policy." The policy had three fundamental principles: no tolerance of provocations from the North, no intention to absorb the North, and the separation of political cooperation from economic cooperation. Private sector overtures would be based on commercial and humanitarian considerations. The use of government resources would entail reciprocity. This policy set the stage for the first inter-Korean summit, held in Pyongyang on June 13-15, 2000.

Following his inauguration in February 2003, R.O.K. President Roh Moo-hyun, continued his predecessor's policy of engagement with the North, although he abandoned the name "Sunshine Policy." The R.O.K. and D.P.R.K. held a second inter-Korean summit on October 2-4, 2007 in Pyongyang. Following the inauguration of R.O.K. President Lee Myung-bak in February 2008, inter-Korean relations have declined as the D.P.R.K. criticized Lee's policy of seeking greater reciprocity in inter-Korean relations. In the fall of 2009, inter-Korean relations showed some signs of potential improvement following a reunion of separated families and several meetings to discuss joint economic projects and other issues. However, no progress was made.

Inter-Korean relations further deteriorated following the D.P.R.K.’s sinking of the R.O.K. warship Cheonan on March 26, 2010, which killed 46 R.O.K. sailors. Although the D.P.R.K. has continued to deny responsibility for the attack, an objective and scientific investigation found overwhelming evidence that the warship was sunk by a North Korean torpedo fired from a North Korean submarine. On July 9, 2010, the UN Security Council unanimously adopted a Presidential Statement that condemned the attack on the Cheonan. On November 23, 2010, the D.P.R.K. launched an unprovoked attack against Yeonpyong Island, killing two R.O.K. soldiers and two civilians. The D.P.R.K.’s attack on Yeonpyong Island was a clear violation of the armistice agreement.

The United States supports engagement and North-South dialogue and cooperation. Major joint economic projects have included a tourism development in Mt. Kumgang, the re-establishment of road and rail links across the DMZ, and a joint North-South industrial park near the North Korean city of Kaesong (see further information below in the section on the Economy). Following the sinking of the Cheonan, the R.O.K. severed nearly all economic links with the D.P.R.K., with the exception of the Kaesong Industrial Complex (KIC).

Relations Outside the Peninsula
Throughout the Cold War, North Korea balanced its relations with China and the Soviet Union to extract the maximum benefit from the relationships at minimum political cost. In the 1970s and early 1980s, the establishment of diplomatic relations between the United States and China, the Soviet-backed Vietnamese occupation of Cambodia, and the Soviet occupation of Afghanistan created strains between China and the Soviet Union and, in turn, in North Korea's relations with its two major communist allies. North Korea tried to avoid becoming embroiled in the Sino-Soviet split, obtaining aid from both the Soviet Union and China and trying to avoid dependence on either. Following Kim Il-sung's 1984 visit to Moscow, there was an improvement in Soviet-D.P.R.K. relations, resulting in renewed deliveries of Soviet weaponry to North Korea and increases in economic aid.

The establishment of diplomatic relations by South Korea with the Soviet Union in 1990 and with China in 1992 seriously strained relations between North Korea and its traditional allies. Moreover, the fall of communism in eastern Europe in 1989 and the disintegration of the Soviet Union in 1991 resulted in a significant drop in communist aid to North Korea. Despite these changes and its past reliance on this military and economic assistance, North Korea continued to proclaim a militantly independent stance in its foreign policy in accordance with its official ideology of "Juche," or self-reliance.

Both North and South Korea became parties to the Biological Weapons Convention in 1987. North Korea is not a member of the Chemical Weapons Convention, nor is it a member of the Missile Technology Control Regime (MTCR).

North Korea has maintained membership in several multilateral organizations. It became a member of the UN in September 1991. North Korea also belongs to the Food and Agriculture Organization (FAO); the International Civil Aviation Organization; the International Postal Union; the UN Conference on Trade and Development; the International Telecommunications Union; the UN Development Program (UNDP); the UN Educational, Scientific, and Cultural Organization; the World Health Organization; the World Intellectual Property Organization; the World Meteorological Organization; the International Maritime Organization; the International Committee of the Red Cross; and the Nonaligned Movement. The UN country team (a group of the 5 UN agencies with a permanent presence in the D.P.R.K.) consists of the UNDP, the World Food Program, the UN Population Fund (UNFPA), the UN Children’s Fund (UNICEF), the World Health Organization (WHO), and the FAO. The D.P.R.K. is also a member of the ASEAN Regional Forum.

The D.P.R.K. was forced to abandon some of the more extreme manifestations of its "self-reliance" ideology in the mid-1990s following the death of Kim Il-sung and the deterioration of its economy. In subsequent years, the D.P.R.K. has continued to pursue a tightly restricted economic policy while continuing to search for economic aid and development assistance. These efforts have been matched by an increased determination to counter perceived external and internal threats by a self-proclaimed "Songun," or military first, policy.

At times, North Korea has sought to broaden its formal diplomatic relationships in a limited and cautious manner. In July 2000, North Korea began participating in the ASEAN Regional Forum (ARF), with Foreign Minister Paek Nam-sun attending the ARF ministerial meeting in Bangkok. The D.P.R.K. also expanded its bilateral diplomatic ties in 2000 by establishing diplomatic relations with Italy, the Philippines, Australia, Canada, the U.K., Germany, and many other European countries.

In the September 19, 2005 Joint Statement issued at the end of the fourth round of Six-Party Talks, the United States and the D.P.R.K. committed to undertake steps to normalize relations. The D.P.R.K. and Japan also agreed to take steps to normalize relations and to discuss outstanding issues of concern, such as the North Korean Government’s abductions of Japanese citizens. The February 13, 2007 Initial Actions agreement established U.S.-D.P.R.K. and Japan-D.P.R.K. bilateral working groups on normalization of relations, both of which met several times before the D.P.R.K.’s withdrawal from the Six-Party Talks (see below, Denuclearization of the Korean Peninsula).

Since 2006, China has implemented UN sanctions against North Korea while simultaneously providing economic support to maintain North Korea’s stability. The traditional China-D.P.R.K. friendship dating back to before the Korean War was described in November 2009 by Kim Jong-il as “unbreakable.”

Terrorism
The D.P.R.K. is not known to have sponsored terrorist acts since the 1987 bombing of Korean Airlines flight 858. Pyongyang continues to provide sanctuary to members of the Japanese Communist League-Red Army Faction (JRA) who participated in the hijacking of a Japan Airlines flight to North Korea in 1970.

The D.P.R.K. has made several statements condemning terrorism. In October 2000, the United States and the D.P.R.K. issued a joint statement on terrorism in which "the two sides agreed that international terrorism poses an unacceptable threat to global security and peace, and that terrorism should be opposed in all its forms." The United States and the D.P.R.K. agreed to support the international legal regime combating international terrorism and to cooperate with each other to fight terrorism. The D.P.R.K. became a signatory to the Convention for the Suppression of Financing of Terrorism and a party to the Convention Against the Taking of Hostages in November 2001. In June 2008, the D.P.R.K. Foreign Ministry issued an authoritative statement providing assurances that the D.P.R.K. supports international efforts to combat terrorism and opposes all forms of terrorism.

In the February 13, 2007 Initial Actions agreement, the United States agreed to begin the process of removing the designation of the D.P.R.K. as a state sponsor of terrorism. On June 26, 2008, following the D.P.R.K.'s submission of its nuclear declaration and progress on disablement, President George W. Bush announced that the United States would no longer apply the Trading with the Enemy Act to North Korea. Additionally, on October 11, the Secretary of State rescinded the United States’ designation of North Korea as a state sponsor of terrorism.

In May 2010, the United States re-certified North Korea as “not cooperating fully” with U.S. counterterrorism efforts under Section 40A of the Arms Export and Control Act, as amended. Pursuant to this certification, defense articles and services could not be sold or licensed for export to North Korea from October 1, 2009 to September 30, 2010.

Abductions
In the past, the D.P.R.K. has also been involved in the abduction of foreign citizens. In 2002, Kim Jong-il acknowledged to Japanese Prime Minister Junichiro Koizumi the involvement of D.P.R.K. "special institutions" in the kidnapping of Japanese citizens between 1977 and 1983 and said that those responsible had been punished. While five surviving victims and their families were allowed to leave the D.P.R.K. and resettle in Japan in October 2002, 12 other cases remain unresolved and continue to be a major issue in Japan-D.P.R.K. relations. The R.O.K. Government estimated that approximately 480 of its civilians, abducted or detained by the D.P.R.K. following the end of the Korean War, remained in the D.P.R.K. The R.O.K. Government also estimated that 560 soldier and prisoners of war missing in action also remained alive in the D.P.R.K. In October 2005, the D.P.R.K. acknowledged for the first time having kidnapped R.O.K. citizens in previous decades, claiming that several abductees, as well as several POWs from the Korean War, were still alive. In June 2006, North Korea allowed Kim Young-nam, a South Korean abducted by the North in 1978, to participate in a family reunion. In June 2008, the D.P.R.K. agreed to reopen the investigation into the abduction issue. In August 2008, the D.P.R.K. and Japan agreed to a plan for proceeding with the abductions investigation. However, the D.P.R.K. has not yet begun the investigation. The United States has continued to press the D.P.R.K. to address the concerns of Japan and the R.O.K. about the abductions issue.

U.S. POLICY TOWARD NORTH KOREA

U.S. Support for North-South Dialogue and Reunification
The United States supports the peaceful reunification of Korea on terms acceptable to the Korean people and recognizes that the future of the Korean Peninsula is primarily a matter for them to decide. The United States believes that a constructive and serious dialogue between the authorities of North and South Korea is necessary to resolve outstanding problems, including the North's attempts to develop a nuclear program and human rights abuses, and to encourage the North's integration with the rest of the international community.

Denuclearization of the Korean Peninsula
North Korea joined the Nuclear Non-Proliferation Treaty (NPT) as a non-nuclear weapons state in 1985. North and South Korean talks begun in 1990 resulted in the 1992 Joint Declaration for a Non-Nuclear Korean Peninsula (see Foreign Relations: Reunification Efforts Since 1971). However, the international standoff over the D.P.R.K.’s failure to implement an agreement with the IAEA for the inspection of the North's nuclear facilities led Pyongyang to announce in March 1993 its intention to withdraw from the NPT. UN Security Council Resolution (UNSCR) 825 in May 1993 urged the D.P.R.K. to cooperate with the IAEA and to implement the 1992 North-South Denuclearization Statement. It also urged all UN member states to encourage the D.P.R.K. to respond positively to this resolution and to facilitate a solution to the nuclear issue.

The United States opened talks with the D.P.R.K. in June 1993 and eventually reached agreement in October 1994 on a diplomatic roadmap, known as the Agreed Framework, for the denuclearization of the Korean Peninsula. The Agreed Framework called for the following steps:

  • North Korea agreed to freeze its existing nuclear program and allow monitoring by the IAEA.
  • Both sides agreed to cooperate to replace the D.P.R.K.'s graphite-moderated reactors with light water reactor (LWR) power plants, by a target date of 2003, to be financed and supplied by an international consortium (later identified as the Korean Peninsula Energy Development Organization or KEDO).
  • As an interim measure, the United States agreed to provide North Korea with 500,000 tons of heavy fuel oil annually until the first reactor was built.
  • The United States and D.P.R.K. agreed to work together to store safely the spent fuel from the five-megawatt reactor and dispose of it in a safe manner that did not involve reprocessing in the D.P.R.K.
  • The two sides agreed to move toward full normalization of political and economic relations.
  • The two sides agreed to work together for peace and security on a nuclear-free Korean Peninsula.
  • The two sides agreed to work together to strengthen the international nuclear non-proliferation regime.

In accordance with the terms of the Agreed Framework, in January 1995 the U.S. Government eased economic sanctions against North Korea in response to North Korea's freezing its graphite-moderated nuclear program under United States and IAEA verification. North Korea agreed to accept the decisions of KEDO, the financier and supplier of the light water reactors, with respect to provision of the reactors. KEDO subsequently identified Sinpo as the LWR project site and held a groundbreaking ceremony in August 1997. In December 1999, KEDO and the (South) Korea Electric Power Corporation (KEPCO) signed the Turnkey Contract (TKC), permitting full-scale construction of the LWRs.

In January 1995, as called for in the 1994 Agreed Framework, the United States and D.P.R.K. negotiated a method to store the spent fuel from the D.P.R.K.’s five-megawatt nuclear reactor. Under this method, United States and D.P.R.K. operators worked together to can the spent fuel and store the canisters in a spent fuel pond; canning began in 1995. In April 2000, canning of all accessible spent fuel rods and rod fragments was completed.

In 1998, the United States identified an underground site in Kumchang-ni, North Korea, which it suspected of being nuclear-related. In March 1999, after several rounds of negotiations, the United States and D.P.R.K. agreed that the United States would be granted "satisfactory access" to the underground site at Kumchang-ni. In October 2000, during D.P.R.K. Special Envoy Marshal Jo Myong-rok's visit to Washington, and after two visits to the site by teams of U.S. experts, the United States announced in a Joint Communiqué with the D.P.R.K. that U.S. concerns about the site had been resolved.

In 1999, the D.P.R.K. announced a voluntary moratorium on testing of long-range missiles. The D.P.R.K. subsequently reaffirmed this moratorium in June 2000 and on October 12, 2000. The moratorium continued until 2005, when the D.P.R.K. announced its termination as a result of what the D.P.R.K. claimed was “U.S. hostility.”

The United States and the D.P.R.K. launched Agreed Framework Implementation Talks in May 2000. The United States and the D.P.R.K. also began negotiations for a comprehensive missile agreement. In January 2001, the Bush administration discontinued nuclear and missile talks, specifying that it intended to review the U.S. policy on North Korea. The administration announced on June 6, 2001 that it was prepared to resume dialogue with North Korea on a broader agenda of issues--including North Korea's conventional force posture, missile development and export programs, human rights practices, and humanitarian issues.

In October 2002, a U.S. delegation headed by then-Assistant Secretary of State for East Asian and Pacific Affairs James A. Kelly confronted North Korea with the assessment that the D.P.R.K. was pursuing an undeclared uranium enrichment program, in violation of North Korea's IAEA safeguards obligation and its commitments in the 1992 North-South Joint Declaration on Denuclearization of the Korean Peninsula and the Agreed Framework. North Korean officials asserted to the U.S. delegation the D.P.R.K.'s "right" to a uranium enrichment program and indicated that that it had such a program. The U.S. side stated that North Korea would have to terminate the program before any further progress could be made in U.S.-D.P.R.K. relations. The United States also made clear that if this program were verifiably eliminated, it would be prepared to work with North Korea on the development of a fundamentally new relationship. After denying a highly enriched uranium program since 2003, North Korea announced in April 2009 that it was developing uranium enrichment capability to produce fuel for a planned light water reactor; in September it claimed its enrichment research had “entered into completion phase.” In November 2002, the member countries of KEDO's Executive Board agreed to suspend heavy fuel oil shipments to North Korea pending a resolution of the nuclear dispute.

In late 2002 and early 2003, North Korea terminated the freeze on its existing plutonium-based nuclear facilities at Yongbyon, expelled IAEA inspectors, removed seals and monitoring equipment at Yongbyon, announced its withdrawal from the NPT, and resumed reprocessing of spent nuclear fuel to extract plutonium for weapons purposes. North Korea announced that it was taking these steps to provide itself with a deterrent force in the face of U.S. threats and U.S. "hostile policy." Beginning in mid-2003, the North repeatedly claimed to have completed reprocessing of the spent fuel rods previously frozen at Yongbyon and publicly said that the resulting fissile material would be used to bolster its "nuclear deterrent force." There is no independent confirmation of North Korea's claims. The KEDO Executive Board suspended work on the LWR Project beginning December 1, 2003.

In early 2003, the United States proposed multilateral talks on the North Korean nuclear issue. North Korea initially opposed such a process, maintaining that the nuclear dispute was purely a bilateral matter between the United States and the D.P.R.K. However, under pressure from its neighbors and with the active involvement of China, North Korea agreed to three-party talks with China and the United States in Beijing in April 2003 and to Six-Party Talks with the United States, China, R.O.K., Japan, and Russia in August 2003, also in Beijing. During the August 2003 round of Six-Party Talks, North Korea agreed to the eventual elimination of its nuclear programs if the United States were first willing to sign a bilateral "non-aggression treaty" and meet various other conditions, including the provision of substantial amounts of aid and normalization of relations. The North Korean proposal was unacceptable to the United States, which insisted on a multilateral resolution to the issue and opposed provision of benefits before the D.P.R.K.'s complete denuclearization. In October 2003, President Bush said he would consider a multilateral written security guarantee in the context of North Korea's complete, verifiable, and irreversible elimination of its nuclear weapons program.

China hosted a second round of Six-Party Talks in Beijing in February 2004. The United States saw the results as positive, including the announced intention of all parties to hold a third round by the end of June and to form a working group to maintain momentum between plenary sessions.

At the third round of Six-Party Talks in Beijing, in June 2004, the United States tabled a comprehensive and substantive proposal aimed at resolving the nuclear issue. All parties agreed to hold a fourth round of talks by the end of September 2004. Despite its commitment, the D.P.R.K. refused to return to the table, and in the months that followed issued a series of provocative statements. In a February 10, 2005, Foreign Ministry statement, the D.P.R.K. declared that it had "manufactured nuclear weapons" and was "indefinitely suspending" its participation in the Six-Party Talks. In Foreign Ministry statements in March, the D.P.R.K. said it would no longer be bound by its voluntary moratorium on ballistic missile launches, and declared itself a nuclear weapons state.

Following intense diplomatic efforts by the United States and other parties, the fourth round of Six-Party Talks were held in Beijing over a period of 20 days from July-September 2005, with a recess period in August. Discussions resulted in the September 19, 2005 Joint Statement, in which the six parties unanimously reaffirmed the goal of verifiable denuclearization of the Korean Peninsula in a peaceful manner. The D.P.R.K. for the first time committed to abandon all nuclear weapons and existing nuclear programs and to return, at an early date, to the NPT and to IAEA safeguards. The other parties agreed to provide economic cooperation and energy assistance. The United States and the D.P.R.K. agreed to take steps to normalize relations subject to bilateral policies, which for the United States includes concerns over North Korea's ballistic missile programs and human rights conditions. While the Joint Statement provides a vision of the end-point of the Six-Party process, much work lies ahead to implement the elements of the agreement.

A fifth round of talks began in November 2005, but ended inconclusively as the D.P.R.K. began a boycott of the Six-Party Talks, citing the "U.S. hostile policy" and specifically U.S. law enforcement action that had led in September to a freeze of North Korean accounts in Macau's Banco Delta Asia (BDA). The United States held discussions in Kuala Lumpur (July 2006) and New York (September 2006) with other Six-Party partners, except North Korea, along with representatives from other regional powers in the Asia-Pacific region, to discuss Northeast Asian security issues, including North Korea. On July 4-5, 2006 (local Korea time), the D.P.R.K. launched seven ballistic missiles, including six short- and medium-range missiles and one of possible intercontinental range. In response, the UN Security Council unanimously adopted Resolution 1695 on July 15, which demanded that the D.P.R.K. suspend all activities related to its ballistic missile program and reestablish existing commitments to a moratorium on missile launching. The resolution also required all UN member states, in accordance with their national legal authorities and consistent with international law, to exercise vigilance and prevent missile and missile-related items, materials, goods and technology from being transferred to the D.P.R.K.'s missile or weapons of mass destruction (WMD) programs, prevent the procurement of missiles or related items, materials, goods and services from the D.P.R.K., and the transfer of any financial resources in relation to the D.P.R.K.'s missile or WMD programs. The D.P.R.K. immediately rejected the resolution.

On October 9, 2006, North Korea announced the successful test of a nuclear explosive device, verified by the United States on October 11. In response, the United Nations Security Council, citing Chapter VII of the UN Charter, unanimously passed Resolution 1718, condemning North Korea and imposing sanctions on certain luxury goods and trade of military units, WMD and missile-related parts, and technology transfers.

The Six-Party Talks resumed in December 2006 after a 13-month hiatus. Following a bilateral meeting between the United States and D.P.R.K. in Berlin in January 2007, another round of Six-Party Talks was held in February 2007. On February 13, 2007, the parties reached an agreement on "Initial Actions for the Implementation of the Joint Statement" in which North Korea agreed to shut down and seal its Yongbyon nuclear facility and to invite back IAEA personnel to conduct all necessary monitoring and verification of these actions as agreed between the IAEA and the D.P.R.K. The other five parties agreed to provide emergency energy assistance to North Korea in the amount of 50,000 tons of heavy fuel oil (HFO) in the initial phase and the equivalent of 950,000 tons of HFO in the next phase of North Korea's denuclearization. The six parties also established five working groups to form specific plans for implementing the Joint Statement in the following areas: denuclearization of the Korean Peninsula, normalization of U.S.-D.P.R.K. relations, normalization of Japan-D.P.R.K. relations, economic and energy cooperation, and a Northeast Asia peace and security mechanism. All parties agreed that the working groups would meet within 30 days of the agreement, which they did. The agreement also envisions the directly-related parties negotiating a permanent peace regime on the Korean Peninsula at an appropriate separate forum.

The sixth round of Six-Party Talks took place on March 19-23, 2007. The parties reported on the first meetings of the five working groups. At the invitation of the .D.P.R.K., Assistant Secretary of State Christopher Hill visited Pyongyang in June 2007 as part of ongoing consultations with the six parties on implementation of the Initial Actions agreement. In July 2007, the D.P.R.K. shut down the Yongbyon nuclear facility, as well as an uncompleted reactor at Taechon, and IAEA personnel returned to the D.P.R.K. to monitor and verify the shut-down and to seal the facility. Concurrently, the R.O.K. delivered 50,000 metric tons of HFO in August 2007. All five working groups met in August and September to discuss detailed plans for implementation of the next phase of the Initial Actions agreement, and the D.P.R.K. invited a team of experts from the United States, China, and Russia to visit the Yongbyon nuclear facility in September 2007 to discuss specific steps that could be taken to disable the facility.

The subsequent September 27-30 Six-Party plenary meeting resulted in the October 3, 2007 agreement on "Second-Phase Actions for the Implementation of the Joint Statement." Under the terms of the October 3 agreement, the D.P.R.K. agreed to disable all existing nuclear facilities subject to abandonment under the September 2005 Joint Statement and the February 13 agreement. The Parties agreed to complete by December 31, 2007 a set of disabling actions for the three core facilities at Yongbyon--the five-megawatt Experimental Reactor, the Radiochemical Laboratory (Reprocessing Plant), and the Fresh Fuel Fabrication Plant--with oversight from a team of U.S. experts, The D.P.R.K. also agreed to provide a complete and correct declaration of all its nuclear programs in accordance with the February 13 agreement by December 31, 2007 and reaffirmed its commitment not to transfer nuclear materials, technology, or know-how. The United States, R.O.K., China, and Russia continued to provide HFO and HFO-equivalent energy assistance to the D.P.R.K., to fulfill the commitment of one million tons in the initial and second phases, in parallel with the D.P.R.K.'s actions on disablement and declaration.

In November 2007, the D.P.R.K. began to disable the three core facilities at Yongbyon, and U.S. experts were present at the site to oversee the disabling actions. Assistant Secretary of State Christopher Hill visited Pyongyang again in December 2007 as part of ongoing consultations on the implementation of Second-Phase Actions and carried with him a letter from President George W. Bush to Kim Jong-il. While the D.P.R.K. missed the December 31 deadline to provide a complete and correct declaration, it provided its declaration to the Chinese, chair of the Six-Party Talks, on June 26, 2008. The D.P.R.K. also imploded the cooling tower at the Yongbyon facility in late June 2008 before international media. Following the D.P.R.K.'s progress on disablement and its provision of a declaration, President Bush announced the lifting of the application of the Trading with the Enemy Act (TWEA) with respect to the D.P.R.K. On October 1-3, 2008, a U.S. team traveled to the D.P.R.K. and reached agreement with the D.P.R.K. on a series of verification measures related to the D.P.R.K.’s nuclear declaration. Following this progress on verification, on October 11, 2008, the Secretary of State rescinded the United States’ designation of North Korea as a state sponsor of terrorism. On December 8-11, 2008, the Six-Party heads of delegation met to discuss the issue of verification of the D.P.R.K.’s nuclear declaration and completion of Second-Phase energy assistance and disabling actions, but the meeting ended without agreement.

Sung Kim was appointed the Special Envoy for the Six-Party Talks in July 2008 and was accorded the rank of Ambassador following confirmation by the United States Senate. In February 2009, the Secretary of State appointed Ambassador Stephen Bosworth as Special Representative for North Korea Policy, making him the senior official overseeing U.S. efforts in the Six-Party Talks to achieve the verifiable denuclearization of the Korean Peninsula in a peaceful manner.

On April 5, 2009, the D.P.R.K. launched a Taepo Dong-2 missile over the Sea of Japan, in violation of UN Security Council Resolution 1718. This action prompted the UN Security Council (UNSC) to issue a unanimous Presidential Statement condemning the launch as a violation of UNSCR 1718, demanding that the D.P.R.K. refrain from further launches, and calling upon the D.P.R.K. and all member states to fully implement their obligations under UNSCR 1718. On April 14, the D.P.R.K. condemned the UNSC statement and withdrew its active participation in the Six-Party Talks. At the same time, the D.P.R.K. demanded the expulsion of IAEA inspectors and U.S. technical experts who had been monitoring the Yongbyon nuclear site. The D.P.R.K. also disclosed its intent to reactivate its nuclear facilities.

On May 25, 2009, the D.P.R.K. announced that it had conducted a second test of a nuclear explosive device. On June 12, 2009, the UN Security Council unanimously adopted Resolution 1874, which expanded on the provisions of UNSCR 1718 to include a ban on all arms transfers to and from the D.P.R.K. (with the exception of the D.P.R.K.’s import of small arms and light weapons, which require UN notification); provisions calling on states to inspect vessels in their territory when there are “reasonable grounds” that banned cargo is on a ship, and obligations to report on their inspections and when other states deny permission to inspect ships, as well as obligations for states to seize and dispose of any banned cargo; and broadened financial measures including a call on states not to provide grants, assistance, loans or public financial support for trade if such support could contribute to the D.P.R.K.’s proliferation efforts, and a call on states to deny financial services, including by freezing assets, where such assets could contribute to prohibited D.P.R.K. programs. In early 2009 the United States appointed Ambassador Philip Goldberg as the U.S. Coordinator for Implementation of UNSCR 1874. In June, July, and August 2009, Ambassador Goldberg led delegations to China, South Korea, Japan, Singapore, Malaysia, Thailand, Russia, the U.A.E., and Egypt to encourage these member states to implement sanctions in a full and transparent manner and to take actions that would shed light on North Korean proliferation-related activities. He also traveled to the United Nations, where he consulted with the UN’s D.P.R.K. (1718) Sanctions Committee. Since the adoption of UNSCR 1874, several states, including the U.A.E., South Korea, Austria, Thailand, and South Africa had reported potential violations of UNSCRs 1718 and 1874 to the UN’s D.P.R.K. Sanctions Committee.

On July 3-4, 2009, the D.P.R.K. fired a series of short-range ballistic missiles into the Sea of Japan. In a September 2009 letter to the UN Security Council President, the D.P.R.K. announced that “experimental uranium enrichment has been successfully conducted to enter into completion phase.” On October 12, 2009, the D.P.R.K. launched additional multiple short-range ballistic missiles.

In November 2009, the D.P.R.K. declared that it had completed reprocessing 8,000 spent nuclear fuel rods in August. In December 2009, Special Representative for North Korea Policy Stephen Bosworth led an interagency delegation to Pyongyang for extensive talks that took place within the context of the Six-Party Talks and focused on the way to achieve the verifiable denuclearization of the Korean Peninsula. The United States and North Korea agreed on the importance of the Six-Party Talks and the need to implement the 2005 Joint Statement, but did not agree on when and how the D.P.R.K. would return to denuclearization talks. As of April 2011, the Six-Party Talks had not resumed.

The D.P.R.K.’s sinking of the R.O.K. naval vessel Cheonan on March 26, 2010 and its shelling of Yeonpyong Island on November 23, 2010 have diminished the prospects for talks to resolve the issues surrounding the D.P.R.K.’s nuclear program. The D.P.R.K.’s revelation of a uranium enrichment program in November 2010 is in violation of its own commitments under the 2005 Joint Statement and its obligations under UN Security Council Resolutions 1718 and 1874. UNSCRs 1718 and 1874 require the D.P.R.K. to abandon all nuclear weapons and existing nuclear programs in a complete, verifiable, and irreversible manner. UNSCR 1874 also requires the D.P.R.K. to immediately cease all related activities; the construction of uranium enrichment facilities is unacceptable and inconsistent with the objective of the verifiable denuclearization of the Korean Peninsula.

Peaceful resolution of the issues on the Korean Peninsula will only be possible if North Korea fundamentally changes its behavior. Secretary of State Hillary Clinton has called on North Korea to take concrete, irreversible denuclearization steps toward fulfillment of the 2005 Joint Statement, comply with international law including UNSCRs 1718 and 1874, cease provocative behaviors, and take steps to improve relations with its neighbors.

ECONOMY
North Korea's economy declined sharply in the 1990s with the end of communism in Eastern Europe, the disintegration of the Soviet Union, and the dissolution of bloc-trading countries of the former socialist bloc. Gross national income per capita is estimated to have fallen by about one-third between 1990 and 2002. The economy has since stabilized and shown some modest growth in recent years, which may be reflective of increased inter-Korean economic cooperation. Output and living standards, however, remain far below 1990 levels. Other centrally-planned economies in similar situations opted for domestic economic reform and liberalization of trade and investment. To date, North Korea has not done so. However, North Korea did formalize some modest wage and price reforms in 2002, and North Korea has been forced to tolerate markets and a small private sector as the state-run distribution system continues to deteriorate. An increasing number of North Koreans work in the informal, private sector to cope with growing hardship and reduced government support. The government, however, seems determined to maintain control. In October 2005, emboldened by an improved harvest and increased food donations from South Korea, the North Korean Government banned private grain sales and announced a return to centralized food rationing. Reports indicate this effort to reassert state control and to control inflation has been largely ineffective. Another factor contributing to the economy's poor performance is the disproportionately large share of GDP (thought to be about one-fourth) that North Korea devotes to its military.

In late November 2009, North Korea redenominated its currency at a rate of 100 to 1. New laws were implemented, including regulations on consumption, tightened state control of the market, and a ban on the possession or use of foreign currencies. The redenomination appears to have resulted in increased inflation and confiscation of operational capital and savings earned by private traders and others working outside state-controlled sectors of the economy.

North Korean industry is operating at only a small fraction of capacity due to lack of fuel, spare parts, and other inputs. Agriculture was 20.9% of GDP as of 2009, although agricultural output has not recovered to early 1990 levels. The infrastructure is generally poor and outdated, and the energy sector has collapsed.

North Korea experienced a severe famine following record floods in the summer of 1995 and continues to suffer from chronic food shortages and malnutrition. The United Nations World Food Program (WFP) provided substantial emergency food assistance beginning in 1995 (two million tons of which came from the United States), but the North Korean Government suspended the WFP emergency program at the end of 2005 and permitted only a greatly reduced WFP program through a protracted relief and recovery operation. However, in April 2011 the WFP announced that it was launching an emergency operation to feed 3.5 million North Koreans. While China and the R.O.K. had provided most of the D.P.R.K.'s food aid in the past, the D.P.R.K. refused to accept food aid from the R.O.K. between Lee Myung-bak's inauguration in February 2008 and January 2010, when the D.P.R.K. accepted the R.O.K.’s offer to provide 10,000 tons of corn. The United States resumed the provision of food assistance to the D.P.R.K. in June 2008 after establishing a strong framework to ensure that the food will reach those most in need. The United States committed to providing up to 400,000 tons of food through WFP and 100,000 tons through U.S. NGOs. From May 2008 to March 2009, the United States provided approximately 170,000 metric tons of U.S. food to the D.P.R.K. In March 2009, the D.P.R.K. stated that it no longer wished to receive U.S. food assistance and requested that personnel monitoring U.S. food distributions depart the D.P.R.K., halting the U.S. food assistance program.

The United States also assisted U.S. NGOs in providing aid to fight the outbreak of infectious diseases following August 2007 floods, and worked with U.S. NGOs to improve the supply of electricity at provincial hospitals in North Korea. Following July 2010 floods, the United States Government supplied medical and other relief supplies to U.S. NGOs for emergency humanitarian assistance for flood relief.

In 1991, following the collapse of the Soviet Union and termination of subsidized trade arrangements with Russia, other former Communist states, and China, North Korea announced the creation of a Special Economic Zone (SEZ) in the northeast regions of Najin (sometimes rendered "Rajin"), Chongjin, and Sonbong. Problems with infrastructure, bureaucracy, and uncertainties about investment security and viability have hindered growth and development of this SEZ. The government announced in 2002 plans to establish a Special Administrative Region (SAR) in Sinuiju, at the western end of the North Korea-China border. However, the government has taken few concrete steps to establish the Sinuiju SAR, and its future is uncertain.

North-South Economic Ties
Two-way trade between North and South Korea, legalized in 1988, had risen to more than $1.68 billion by 2009, much of it related to out-processing or assembly work undertaken by South Korean firms in the Kaesong Industrial Complex (KIC). Ground was broken on the KIC in June 2003, and the first products were shipped from the KIC in December 2004. Plans envision 2,000 firms employing 350,000 workers by 2012. About 122 South Korean small and medium sized companies operate in the KIC, manufacturing mostly garments and footwear and employing more than 46,000 North Korean workers. Until 2007, a significant portion of total two-way trade had included donated goods provided to the North as humanitarian assistance or as part of inter-Korean cooperation projects. However, beginning in 2008, commercial transactions such as general trading and processing-on-commission have accounted for larger portion in overall inter-Korean trade. Most of the goods exported from KIC are sold in South Korea; a small quantity, about 18% of the KIC products, is exported to foreign markets.

Regarding inter-Korean transportation links, as of March 2011, after the Cheonan sinking incident, South Korea suspended all inter-Korean trade with the exception of the KIC. Since the June 2000 North-South summit, North and South Korea have reconnected their east and west coast railroads and roads where these links cross the DMZ and are working to improve these transportation routes. North and South Korea conducted tests of the east and west coast railroads on May 17, 2007 and began cross-border freight service between Kaesong in the D.P.R.K. and Munsan in the R.O.K. in December 2007. Much of the work done in North Korea has been funded by South Korea. The west coast rail and road are complete as far north as the KIC (six miles north of the DMZ), but little work is being done north of Kaesong. On the east coast, the road and the rail line are complete but the rail line is not operational.

R.O.K.-organized tours to Mt. Kumgang in North Korea began in 1998. Since then, more than a million visitors have traveled to Mt. Kumgang. However, the R.O.K. suspended tours to Mt. Kumgang in July 2008 following the shooting death of a South Korean tourist at the resort by a D.P.R.K. soldier. In April 2011 the D.P.R.K. announced that it was terminating its exclusive contract with Hyundai Asan for operating the Mt. Kumgang tours.

In August 2009, Hyundai Group Chairwoman Hyun Jung-eun met with Kim Jong-il and obtained the release of a South Korean worker who had been detained in the D.P.R.K. since March. As part of those discussions, the D.P.R.K. expressed a willingness to resume tourism links and continue talks regarding the KIC. The D.P.R.K. resumed normal cross-border passage to the KIC on September 1, 2009, and D.P.R.K. and R.O.K. officials conducted a joint visit to international industrial zones in China and Vietnam in December 2009. Between September 2009 and February 2010, D.P.R.K. and R.O.K. officials had several meetings to discuss joint tourism projects, the KIC, and other issues. However, the talks resulted in no progress.

Economic Interaction with the United States
The United States imposed a near total economic embargo on North Korea in June 1950 when North Korea attacked the South. U.S. sanctions were eased in stages beginning in 1989 and following the Agreed Framework on North Korea's nuclear programs in 1994. U.S. economic interaction with North Korea remains minimal, and North Korean assets frozen since 1950 remained frozen. In January 2007, pursuant to UN Security Council Resolution 1718, the U.S. Department of Commerce issued new regulations prohibiting the export of luxury goods to North Korea. Many statutory sanctions on North Korea, including those affecting trade in military, dual-use, and missile-related items and those based on multilateral arrangements, remain in place. Most forms of U.S. economic assistance, other than purely humanitarian assistance, are prohibited. North Korea does not enjoy "Normal Trade Relations" with the United States, so any goods manufactured in North Korea are subject to a higher tariff upon entry to the United States. At this time, goods of North Korean origin may not be imported into the United States either directly or through third countries, without prior notification to and approval from the Office of Foreign Assets Control.

On June 26, 2008, President Bush announced the termination of the application of the Trading with the Enemy Act (TWEA) with respect to the D.P.R.K., though some TWEA-based restrictions remain in place. The United States has issued sanctions targeting the D.P.R.K.’s weapons proliferation and illicit activities under Executive Orders 13382 and 13551. The Executive Orders are directed at those involved in proliferation or other illicit activities and their supporters.

Following the D.P.R.K.’s May 25, 2009 nuclear test, the UN Security Council passed Resolution 1874 on June 12, 2009. Resolution 1874 condemned North Korea’s second nuclear test, demanded that the D.P.R.K. not conduct additional nuclear tests or ballistic missile launches, and called on the D.P.R.K. to return to the Non-Proliferation Treaty (NPT) and Six-Party Talks without preconditions.

In addition, the Financial Crimes Enforcement Network (FinCEN) issued an initial advisory June 18, 2009 (amended on December 18, 2009) on North Korean Government agencies’ and front companies’ involvement in illicit financial activities. In light of the financial measures in UNSCRs 1718 and 1874, and the use of deceptive financial practices by North Korea and North Korean entities, as well as individuals acting on their behalf, to hide illicit conduct, FinCEN advised all U.S. financial institutions to take commensurate risk mitigation measures.

Points of contact for U.S. regulations concerning economic activity with North Korea:

  • Treasury--Office of Foreign Assets Control, Tel. (202) 622-2490, http://www.treas.gov/offices/enforcement/ofac/;
  • Commerce--Foreign Policy Controls Division, Bureau of Industry and Security, Tel. (202) 482-4252;
  • Transportation--Office of the Assistant General Counsel for International Law, Tel. (202) 366-2972.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Cuba

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April 28, 2011Bureau of Western Hemisphere Affairs

Background Note: Cuba



Official Name: Republic of Cuba



PROFILE

Geography
Area: 110,860 sq. km. (44,200 sq. mi.); slightly smaller than Pennsylvania.
Cities: Capital--Havana (pop. 2 million). Other major cities--Santiago de Cuba, Camaguey, Santa Clara, Holguin, Guantanamo, Matanzas, Cienfuegos, Pinar del Rio.
Terrain: Flat or gently rolling plains, hills; mountains up to 2,000 meters (6,000 ft.) in the southeast.
Climate: Tropical, moderated by trade winds; hurricane season (August-November); dry season (November-April); rainy season (May-October).

People
Population: 11.2 million; 76% urban, 24% rural (official 2010 statistics).
Ethnic groups: 65% white, 25% mixed, 10% black (official 2002 Cuba census).
Language: Spanish. Literacy--99.8% (25 years and older, according to Cuban Government sources).
Work force (5.07 million): Services (including education, health and social services)--42%; agriculture--19%; commerce and tourism--12%; industry--11%; transport, storage, and communications--6%; construction--5%; mining, electricity, gas and water--2%.

Government
Type: Totalitarian communist state; current government assumed power by force on January 1, 1959.
Independence: May 20, 1902.
Political party: Cuban Communist Party (PCC); only one party allowed.
Administrative subdivisions: 15 provinces, including the city of Havana, and one special municipality (Isle of Youth).

Economy
GDP (official 2010 statistics, based on constant 1997 prices): $51.01 billion.
Real annual growth rate: 3.2% (2001); 1.4% (2002); 3.8% (2003); 5.8% (2004); 11.2% (2005); 12.1% (2006); 7.3% (2007); 4.1% (2008); 1.4% (2009); 2.1% (2010).
GDP per capita income (2010 est., based on constant 1997 prices): $4,545.
Average monthly salary: $20.
Natural resources: Nickel, cobalt, iron ore, copper, manganese, salt, timber, oil, natural gas.
Agriculture: Products--sugar, citrus and tropical fruits, tobacco, coffee, rice, beans, meat, vegetables.
Industry: Types--sugar and food processing, oil refining, cement, electric power, light consumer and industrial products, pharmaceutical and biotech products.
Trade: Exports (2009)--$2.88 billion f.o.b.: nickel/cobalt, oil and oil derivatives, pharmaceutical and biotech products, sugar and its byproducts, tobacco, seafood, citrus, tropical fruits, coffee. Major export markets (2009)--Venezuela $533 million (19%); China $517 million (18%); Canada $434 million (15%); Netherlands $237 million (8%); Spain $155 million (5%); Russia $88 million (3%); Brazil $69 million (2%); Netherlands Antilles $59 million (2%); France $45 million (2%); others $742 million (26%). Imports (2009)--$8.91 billion f.o.b.: petroleum, food, machinery, chemicals. Major import suppliers (2009)--Venezuela $2.6 billion (29%); China $1.17 billion (13%); Spain $753 billion (8%); United States $675 million (8%); Brazil $509 million (6%); Italy $324 million (4%); Mexico $303 million (3%); Canada $292 million (3%); Vietnam $276 million (3%); Germany $275 million (3%); others $1.7 billion (19%).
Cuba has two currencies in circulation: the peso (CUP), and the convertible peso (CUC), both of which are fixed by the government. In March 2011, the Central Bank announced that it decided to re-establish the parity between the CUC and the U.S. dollar, which was altered in April 2005 from $1 per CUC to $1.08 per CUC (0.93 CUC per $1), both for individuals and enterprises. Individuals can buy 24 Cuban pesos (CUP) for each CUC sold, or sell 25 Cuban pesos for each CUC bought; enterprises, however, must exchange CUP and CUC at a 1:1 ratio. The Cuban Government taxes and receives 10% of each conversion of U.S. dollars into CUCs.

Official statistics are available from the Cuban Office of National Statistics. For alternative statistics, see the Economist Intelligence Unit.

PEOPLE AND RELIGION
Cuba is a multiracial society with a population of mainly Spanish and African origins. .Cuba was officially an atheist state from 1959 until a constitutional change in 1992 abolished atheism as the state creed and provided for the separation of church and state. At that time, the Communist Party also lifted its ban on members with religious beliefs. The largest organized religion is the Roman Catholic Church, but evangelical protestant denominations continue to grow rapidly. Baptists, represented in four different conventions, and Pentecostal churches, particularly the Assemblies of God, are probably the largest Protestant denominations. Afro-Cuban religions, a blend of native African religions and Roman Catholicism, are widely practiced. There are also small groups of Jews, Muslims, Baha’i and members of the Church of Jesus Christ of Latter-Day Saints (Mormons).

Although many religious groups report that the situation has improved in recent years, in law and practice the government continues to place restrictions on freedom of religion. The law requires that all religious groups seek official recognition through the Ministry of Justice. As part of the process groups must provide detailed information about finances, foreign associations, and membership lists. Each meeting place must also be approved, through a separate process which requires specific information about meeting times and scheduled activities. The government rarely grants permission for new construction, although it has allowed substantial renovations of existing structures. Imports of religious materials are strictly controlled. The government controls all forms of mass media and grants only very limited broadcast access to religious groups. Religious education in public schools is not permitted nor is the operation of private primary or secondary schools of any kind, with the exception of schools exclusively for expatriates. As with all civil society organizations, the government monitors religious groups and often has resorted to surveillance, infiltration, and harassment of those under suspicion of opposition activities.

Many religious groups now engage in limited community service activities, such as operating facilities for the elderly and needy, providing courses in English or computer skills, or opening small libraries. With approval from the government’s Office of Religious Affairs, legally recognized groups are able to send their leaders abroad to conferences and for training and invite foreign leaders to Cuba.

The Cuban Council of Churches (CCC) is an officially sanctioned umbrella organization that includes 27 religious organizations as full members, eight associate members, two with observer status, and 12 interfaith movements. The CCC is structured into six "zones" across the country and, according to its leadership, represents more than 100,000 Christians. Members elect the CCC leadership directly. Membership in the CCC is voluntary, and other officially recognized groups, including the Catholic Church, Jehovah's Witnesses, and the small Jewish and Muslim communities, do not belong. The government tends to be most tolerant of churches that maintain close relations to the state through the CCC.

Other Cuban religious groups also have benefited from the relative relaxation of official restrictions on religious organizations and activities. Although particularly hard hit by emigration, Cuba's small Jewish community continues to hold services in Havana and has members in Santiago, Camaguey, and other parts of the island. See also the Department's report on international religious freedom for further information.

HISTORY
Spanish settlers established the raising of cattle, sugarcane, and tobacco as Cuba's primary economic pursuits. As the native Indian population died out, African slaves were imported to work the ranches and plantations. Slavery was abolished in 1886.

Cuba was the last major Spanish colony to gain independence, following a lengthy struggle begun in 1868. Jose Marti, Cuba's national hero, helped initiate the final push for independence in 1895. In 1898, the United States entered the conflict after the USS Maine sank in Havana Harbor on February 15 due to an explosion of undetermined origin. In December of that year, Spain relinquished control of Cuba to the United States with the Treaty of Paris. On May 20, 1902, the United States granted Cuba its independence but retained the right to intervene to preserve Cuban independence and stability in accordance with the Platt Amendment. In 1934, the Platt Amendment was repealed. The United States and Cuba concluded a Treaty of Relations in 1934 which, among other things, continued the 1903 agreements that leased the Guantanamo Bay naval base to the United States.

Independent Cuba was often ruled by authoritarian political and military figures who either obtained or remained in power by force. Fulgencio Batista, an army sergeant, organized a non-commissioned officer revolt in September 1933 and wielded significant power behind the scenes until he was elected president in 1940. Batista was voted out of office in 1944 and did not run in 1948. Both those elections were won by civilian political figures with the support of party organizations. Running for president again in 1952, Batista seized power in a bloodless coup 3 months before the election was to take place, suspended the balloting, and began ruling by decree. Many political figures and movements that wanted a return to the government according to the constitution of 1940 disputed Batista's undemocratic rule.

On July 26, 1953, Fidel Castro, who had been involved in increasingly violent political activity before Batista's coup, led a failed attack on the Moncada army barracks in Santiago de Cuba in which more than 100 died. After defending himself in a trial open to national and international media, he was convicted and jailed, and subsequently was freed in an act of clemency, before going into exile in Mexico. There he organized the "26th of July Movement" with the goal of overthrowing Batista, and the group sailed to Cuba on board the yacht Granma, landing in the eastern part of the island in December 1956.

Batista's dictatorial rule fueled increasing popular discontent and the rise of many active urban and rural resistance groups, a fertile political environment for Castro's 26th of July Movement. Faced with a corrupt and ineffective military--itself dispirited by a U.S. Government embargo on weapons sales to Cuba--and public indignation and revulsion at his brutality toward opponents, Batista fled on January 1, 1959. Although he had promised a return to constitutional rule and democratic elections along with social reforms, Castro used his control of the military to consolidate his power by repressing all dissent from his decisions, marginalizing other resistance figures, and imprisoning or executing thousands of opponents. An estimated 3,200 people were executed by the Cuban Government between 1959 and 1962 alone. As the revolution became more radical, hundreds of thousands of Cubans fled the island.

Castro declared Cuba a socialist state on April 16, 1961. For the next 30 years, Castro pursued close relations with the Soviet Union and worked to advance the geopolitical goals of the Soviet Union, funding and fomenting violent subversive and insurrectional activities and participating in foreign interventions until the demise of the U.S.S.R. in 1991.

Relations between the United States and Cuba deteriorated rapidly as the Cuban Government expropriated U.S. properties and moved toward adoption of a one-party communist system. In response, the United States imposed an embargo on Cuba in October 1960, and, in response to Castro's provocations, broke diplomatic relations on January 3, 1961. Tensions between the two governments peaked during the October 1962 missile crisis.

GOVERNMENT AND POLITICAL CONDITIONS
Cuba is a totalitarian communist state headed by General Raul Castro and a cadre of party loyalists. Castro replaced his brother Fidel Castro as chief of state, president of Cuba, and commander-in-chief of the armed forces on February 24, 2008. The first Communist Party Congress (CPC) since 1997 was held in April 2011. On April 19, the final day of the CPC, Raul Castro was officially named first secretary of the Communist Party. He announced that 80-year-old Jose Ramon Machado Ventura would remain second-in-charge and 78-year-old Vice President Ramiro Valdes would remain as number three. The CPC also marked Fidel Castro’s formal resignation from official responsibilities within the party, although he will likely remain an important symbolic figure. Also proposed at the congress were two 5-year term limits for top party and government positions, but the party will not take up the issues of succession and its role in government again until January 2012, when it will hold the next party conference. The Cuban Government seeks to control most aspects of Cuban life through the Communist Party and its affiliated mass organizations, the government bureaucracy, and the state security apparatus. The Ministry of Interior is the principal organ of state security and control.

According to the Soviet-style Cuban constitution of 1976, the National Assembly of People's Power, and its Council of State when the body is not in session, has supreme authority in the Cuban system. Since the National Assembly meets only twice a year for a few days each time, the 31-member Council of State wields power. The Council of Ministers, through its nine-member executive committee, handles the administration of the economy, which is state-controlled except for a small private market sector. Raul Castro is President of the Council of State and Council of Ministers, and Jose Ramon Machado Ventura serves as First Vice President of both bodies. In total, there are five Vice Presidents in the Council of State and seven in the Council of Ministers.

Although the constitution theoretically provides for independent courts, it explicitly subordinates them to the National Assembly and to the Council of State. The People's Supreme Court is the highest judicial body. Due process is routinely denied to Cuban citizens, particularly in cases involving political offenses. The constitution states that all legally recognized civil liberties can be denied to anyone who opposes the "decision of the Cuban people to build socialism."

The Communist Party is constitutionally recognized as Cuba's only legal political party. The party monopolizes all government positions, including the Council of State and judicial offices. Though not a formal requirement, party membership is a de facto prerequisite for high-level official positions and professional advancement in most areas. A small number of non-party members have been permitted by the controlling Communist authorities to serve in the National Assembly. The Communist Party through its front organizations approves candidates for all elected offices. Citizens do not have the right to change the government.

Human Rights
Cuba is a signatory to the Universal Declaration of Human Rights (UDHR) and sits on the UN Human Rights Council. In February 2008, Cuba signed the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social, and Cultural Rights, but has yet to ratify either document. In spite of this, Cuba places severe restrictions on many of the rights described in the UDHR and continues to engage in harassment, surveillance, arbitrary detention, and imprisonment of peaceful human rights activists and political opponents.

In June 2010, the Catholic Church announced that the government would begin releasing dozens of political prisoners. Since that time, more than 40 political prisoners have been released, including nearly all of the prisoners recognized by Amnesty International as “prisoners of conscience.” Many of the released prisoners were arrested during a crackdown in March 2003 known as the “Black Spring,” when authorities rounded up 75 prominent independent journalists, opposition leaders, and human rights activists, eventually condemning them to lengthy prison terms (from 6 to 28 years) for their activities. Most of the releases have been conditioned on the immediate departure of the prisoners for third countries, although a few have been allowed to remain in Cuba.

Since the government does not allow international monitoring of its prisons and does not release information about the prison population, it is difficult to accurately count the number of political prisoners in Cuba, Estimates from human rights groups range from as low as 30 to more than 100. In addition, human rights groups have noted that while the number of political prisoners has decreased, the number of short-term detentions (typically aimed at disrupting planned civil society activities) has increased significantly, from around 900 in 2009 to more than 2,000 in 2010.

Prison conditions are harsh and life-threatening. Overcrowding is rife. Although physical torture is rare, cruel treatment of prisoners--particularly political prisoners and detainees--is common. Prison authorities sometimes beat, neglect, isolate, and deny medical treatment to inmates. Authorities also sometimes deny family visits or limit exposure to sunshine. In February 2010, political prisoner Orlando Zapata Tamayo died following a hunger strike of over 80 days, undertaken to call for the release of political prisoners and improvements in prison conditions. The government has so far refused to allow international monitoring of its prisons, including visits by the Red Cross and the United Nations.

The law subordinates freedom of speech, freedom of the press, and freedom of assembly to the aim of building a “socialist society.” Criticism of national leaders can lead to imprisonment. The government maintains complete control over all forms of mass media, including newspapers, radio and television. The Communist Party, enshrined in the constitution as “the superior leading force of society and of the state,” determines content and editorial tone, resulting in almost complete uniformity across all broadcasts and publications. Independent journalists face censorship as well as detention and harassment by state security. Similarly, the government limits access to the Internet to a small number of professionals and party faithful and employs monitoring and blocking technologies to further restrict freedom. Cuba estimates that 14% of its population has access to the Internet; international estimates are lower, making Cuba among the least-wired countries in the world.

Authorities have used surveillance, short-term detentions, and state-organized mobs to interfere with unauthorized meetings and public demonstrations. Civil society groups have reported dozens of cases in which state security and police prevented or broke up meetings using house arrests, short-term detentions, and checkpoints around a planned meeting site. The government also continues to regularly employ organized mobs to humiliate opponents and interfere with peaceful assemblies. Although the government characterizes counter-demonstrations as spontaneous, participants arrive in government buses and openly coordinate with state security officials.

Authorities also have interfered with privacy and engaged in pervasive monitoring of private communications. Cubans regularly report concerns about private mail and phone conversations being monitored. Recent documentaries shown on state-controlled television included both audio and video of conversations taken covertly and used without permission of the parties involved.

The government also restricts freedom of movement, both domestically and internationally. Cubans must obtain permission to change their place of residence and can be forcibly returned to their home province if they are illegally resident. This law is most commonly employed in the capital, where thousands of people reside illegally and at least dozens are returned to the provinces on a weekly basis.

For international travel to all destinations, Cubans must receive an exit permit. The Cuban Government routinely denies exit permits to political opponents and human rights activists. In addition to political opponents, the government will not grant an exit visa to some types of professionals (e.g., doctors, nurses, etc.) until they have worked in Cuba for a certain number of years after completing their education.

The Cuban Government routinely violates international labor standards. The law does not allow workers to form and join independent unions of their choice. The only legal labor union in the country is the Central de Trabajadores de Cuba (CTC), or the Workers’ Central Union of Cuba, whose leaders are chosen by the CP. The CTC's principal responsibility is to ensure that government production goals are met. It does not bargain collectively, promote worker rights, or protect the right to strike. The government harasses, detains, and has imprisoned leaders of unauthorized labor movements.

For additional information, see also the Department's Country Report on Human Rights Practices for Cuba.

NATIONAL SECURITY
With the loss of Soviet-era subsidies in the early 1990s, Cuba's armed forces have shrunk considerably, both in terms of numbers and assets. Combined active duty troop strength for all three services is estimated at 50,000 to 55,000 personnel (compared to some 235,000 on active duty 10 years ago) and much of Cuba's weaponry appears to be in storage. Cuba's air force, once considered among the best equipped in Latin America, no longer merits that distinction, though it still possesses advanced aircraft and weapons systems; the navy has become primarily a coastal defense force with no blue water capability. The Cuban army is still one of the region's more formidable, but it also is much reduced and no longer has the considerable resources necessary to project power abroad. Exchanges and visits with foreign military allies like Russia, China, and Venezuela have become common over the past few years.

The military plays a dominant role in the economy, particularly in tourism, civil aviation, foreign trade, and retail operations. Cuba’s National Civil Defense, responsible for preparing for and responding to natural disasters and oil spills, is also under the Ministry of Armed Forces. The country's two paramilitary organizations, the Territorial Militia Troops and the Youth Labor Army, have a reduced training capability. Cuba also adopted a "war of the people" strategy that highlights the defensive nature of its capabilities. In this respect, and despite the drain on the country’s resources, the government has continued to hold national military drills in preparation for hypothetical military aggression from the United States. The government continues to maintain a large state security apparatus under the Ministry of Interior to repress dissent within Cuba.

ECONOMY

GDP Growth

Real gross domestic product (GDP) grew by 2.1% in 2010, according to official statistics. However, Cuba uses a unique “social” method for calculating GDP which makes its figures impossible to compare with any other country in the world. The reported growth reflected a slight improvement on the 1.4% growth in 2009 and 1.9% growth the Cuban Government had forecast for 2010.

Economic Structure
The Cuban Government continues to adhere to socialist principles in organizing its state-controlled economy. Most of the means of production are owned and run by the government and, according to Cuban Government statistics, about 83% of the labor force is employed by the state. An additional 5% of the labor force is employed by cooperatives closely connected with the state. Only 12% of the labor force works in the private sector, including private farmers, artists, and 142,000 self-employed ("cuentapropistas"), representing less than 3% of the entire workforce. More than 60% of the workforce is employed in non-productive sectors. However, the Cuban Government has announced its intention to undertake economic reforms to reduce the size of the state sector and create opportunities for small-scale enterprises. Implementation of these reforms remains pending.

Challenges
The Cuban economy suffers first and foremost from a lack of productivity and an overdependence on the external sector. Cuba suffered a significant decline in gross domestic product of at least 35% between 1989 and 1993 as the loss of Soviet subsidies laid bare the economy's fundamental weaknesses. To alleviate the economic crisis, in 1993 and 1994 the government introduced a few market-oriented reforms, including opening to tourism, allowing some foreign investment, legalizing the dollar, and authorizing self-employment for some 150 occupations. These measures resulted in modest economic growth, although the official statistics are deficient and provide an incomplete measure of Cuba's real economic situation. From 2000 to 2009, Cuba experienced a series of severe economic disruptions, including lower sugar and nickel prices, increases in petroleum costs, devastating hurricanes in 2001, 2004, and 2008, a major drought in the eastern half of the island, increasing external debt, liquidity issues, and stagnant or decreasing agricultural and industrial productivity. Significant economic assistance from Venezuela, and to a lesser degree China, has helped keep the Cuban economy afloat.

Living conditions in 2010 remained well below the 1989 level. Moreover, the gap in the standard of living is widening between those with access to convertible pesos and those without. Jobs that can earn salaries in convertible pesos or tips from foreign businesses and tourists have become highly desirable. It is not uncommon to see doctors, engineers, scientists, and other professionals working in restaurants or as taxi drivers. An estimated $1 billion in yearly remittances exacerbates the gap.

Prolonged austerity and the state-controlled economy's inefficiency in providing adequate goods and services have created conditions for a flourishing informal economy in Cuba. As the variety and amount of goods available in state-run peso stores has declined and prices at convertible peso stores remain unaffordable to most of the population, Cubans have turned increasingly to the black market to obtain needed food, clothing, and household items. Pilferage of items from the work place to sell on the black market or illegally offering services on the sidelines of official employment is common. A report by an independent economist and opposition leader speculates that more than 40% of the Cuban economy operates in the informal sector. Petty theft and corruption has reached such critical proportions that (now former) President Fidel Castro acknowledged it could bring the end of the revolution. In the last few years, the government has carried out an anti-corruption campaign, including the creation of a Comptroller General’s Office in 2009, repeated street-level crackdowns, and ongoing ideological appeals. So far, these measures have yielded limited if any results.

Venezuela
Fifteen years after the demise of the Soviet Union the Cuban Government found in Hugo Chavez’s Venezuela a new benefactor. The politically motivated preferential relationships with this country have replaced tourism as the main engine of growth for the Cuban economy since the second half of 2004. Its main component has been the exchange of medical services for oil at indexed prices and with long-term financing of up to 50% at subsidized interest rates. The transfer of financial resources from Venezuela to Cuba has also materialized in credits for projects at concessionary interest rates, the creation of joint ventures and a large number of cooperation projects.

As a whole, the preferential economic relationship with Venezuela has allowed the Cuban Government to more than double its import capacity, which had historically been closely related to GDP growth, and to carry out multibillion dollar investments both in infrastructure and productive sectors. This factor, together with almost tripled nickel prices in the world market between 2004 and 2008 explains the high growth rates registered in this period, but also allowed (now former) President Fidel Castro to start reversing some of the liberalizing and decentralizing reforms introduced in the 1993-2003 period.

Economic Reform
In his February 24, 2008 inaugural address, Raul Castro said the Cuban Government would "advance in an articulate, sound and well-thought out manner" a series of measures that would raise the Cuban standard of living and tie individual prosperity to individual initiative and work performance. Castro also referred to excess "prohibitions and regulations," the simplest of which the Cuban Government would start removing "in the next few weeks." More complex "reforms," he said, could only be introduced after changes to certain legal regulations.

Since February 2008, Raul Castro's government has announced it would pursue the following initiatives: Expanding access to public land for private farmers; eliminating or reducing excessive subsidies, including food rations and subsidized lunches in workplace cafeterias; reducing inflated employment rolls; permitting some Cubans to own their homes; increasing wages and retirement pensions; raising the retirement age; upgrading public transportation systems and infrastructure; new licenses for private taxis to operate; limited deregulation of the construction industry; expanding access to certain previously restricted consumer goods (like cell phones, computers, microwaves, toasters, DVD players, motorcycles, air conditioners, electric ovens, and agricultural supplies and tools); consolidation and modernization of Cuba's family doctor program; and launching a new 24-hour television station to include mostly foreign-produced content.

In April 2010, President Raul Castro announced that there are more than 1 million “excess” workers in Cuba. In September 2010, the Cuban Government announced that more than 500,000 state workers, 10% of the workforce, would be laid off by the first quarter of 2011. To absorb these workers, the government said it would reduce regulations on private sector employment and expand the cooperative sector. In October 2010, the Cuban Government published new rules regulating the self-employment sector, including new activities (increasing the number of activities authorized to 178), opening the door for self-employed workers to hire labor, and introducing a new tax scheme to include taxes on sales, profit, payroll, and social security. By the end of 2010, the Cuban Government announced it had granted 75,000 new licenses for self-employment activities, which represents more than a 50% increase from the number authorized in 2009.

In April 2011, the Communist Party Congress (CPC) held a party congress for the first time in 14 years, and endorsed reforms previously introduced by President Raul Castro. Most notably, these reforms include allowing the purchase/sale of private property and possible credit mechanisms for small businesses and cooperatives.

Reforms introduced so far, at a very slow pace, have been insufficient to reverse the deep systemic crisis first brought to light with the departure of Soviet economic support and exacerbated by a liquidity crisis that peaked in 2008-2009.

Key Sectors
Exports of professional services, mainly doctors and nurses to Venezuela, has been the main source of hard currency revenues for the Cuban economy since 2005.

Sugar, which was the mainstay of the island's economy for most of its history, has fallen upon troubled times. In 1989, production was more than 8 million tons, but by 2009, it had fallen to barely 1 million tons. Inefficient planting and cultivation methods, poor management, shortages of spare parts, and poor transportation infrastructure combined to deter the recovery of the sector. In June 2002, the government announced its intention to implement a "comprehensive transformation" of this declining sector. Almost half the existing sugar mills were closed, and more than 100,000 workers were laid off. The government promised that these workers would be "retrained" in other fields, though it is unlikely they will find new jobs in Cuba's stagnant economy. The sugar sector has continued to decline since the restructuring, with output registering a downward trend and averaging just 1.6 million tons from 2003-2009.

Tourism figures prominently in the Cuban Government's plans for development, and a top official casts it as at the "heart of the economy." Havana devotes significant resources to building new tourist facilities and renovating historic structures for use in the tourism sector. Roughly 1.7 million tourists visited Cuba in 2001, generating about $1.85 billion in gross revenues; in 2003, the number rose to 1.9 million tourists, predominantly from Canada and the European Union (EU), generating revenue of $2.1 billion. In 2004, the number of tourists to Cuba crossed the 2 million mark (2.05 million), including the so-called "medical tourists" from other Latin American countries seeking medical treatment at Cuban facilities. Since 2004, the volume of tourists has remained relatively consistent, at 2.32 million (2005), 2.2 million (2006), 2.1 million (2007), 2.35 million (2008), 2.42 million (2009), and 2.53 million (2010). Tourism revenue, however, fell 11% in 2009 due to visitors traveling for less time and spending less money per person. Tourism revenue in 2010 rebounded only slightly to $2.4 billion.

According to the Cuban Ministry of the Basic Industry (MINBAS), nickel became the leading export and the top foreign exchange earner in 2007, valued at approximately $2.8 billion. Nickel extraction in 2007 was 2.2% higher than in 2006. The main market for nickel exports is China. Cuba produced between 75,000 and 76,000 tons of nickel in 2007. The Cuban Government predicted that nickel and cobalt production would reach a record 80,000 tons in 2008. The world nickel price dropped sharply in 2008, and nickel revenue fell 47% to $1.5 billion. Prices fell further in 2009, and revenue was $870 million. In 2010, world nickel prices rebounded and revenue most likely returned to 2008 levels, although Cuba has not yet released final revenue figures.

Cuba's pharmaceutical and biotechnology industry is another emerging sector, ranking third in foreign sales behind nickel and oil products, and ahead of traditional products such as tobacco, rum, and sugar. Exports of pharmaceutical and biotech products were between $300 and $350 million in 2007-2008 and jumped to $520 million in 2009.

Remittances also play a large role in Cuba's economy. Cuba does not publish accurate economic statistics, but academic sources estimate that remittances total from $800 million to $1.5 billion per year, with most coming from families in the United States. U.S. regulatory changes announced in April 2009 allow unlimited remittances to family members, excluding certain Cuban Government officials and members of the Cuban Communist Party. The total amount of family remittances that an authorized traveler may carry to Cuba is now $3,000. In January 2011, the United States announced further changes that permit anyone under U.S. jurisdiction to send up to $500 per quarter to anyone else in Cuba (with the same exclusions as above). The changes also authorize unlimited remittances to religious organizations in Cuba.

Beginning in November 2004, the government mandated that U.S. dollars be exchanged for "convertible pesos"--a local currency that can be used in special shops on the island but has no value internationally--at an 8% exchange rate conversion plus up to 2% in fees. In addition, the Cuban Government levies a 10% tax on every conversion of U.S. dollars (and only U.S. dollars). This results in nearly 20% in fees that disproportionately affect Cubans who receive remittances from relatives in the United States. However, Western Union announced in December 2010 that it received permission from the U.S. and Cuban governments to remit payments in Cuban convertible pesos, thus avoiding the 10% tax on U.S. dollars. The Cuban Government captures dollar remittances by allowing Cuban citizens to shop in state-run "dollar stores," which sell food, household, and clothing items at a high mark-up averaging over 240% of face value.

Foreign Investment and Debt
To help keep the economy afloat, Cuba has actively courted foreign investment in targeted sectors. This investment often takes the form of joint ventures with the Cuban Government holding half of the equity, management contracts for tourism facilities, or financing for agricultural crops. A new legal framework laid out in 1995 allowed for majority foreign ownership in joint ventures with the Cuban Government. In practice, majority ownership by the foreign partner is nonexistent. The number of joint ventures increased from 1990 to 2002, reaching a peak of 403. Since 2002, the number of joint ventures has steadily declined to 218 in 2009. Responding to this decline in the number of joint ventures, a spokesperson for the Ministry of Foreign Investment explained that foreign investment is not a pillar of development in and of itself. Moreover, a hostile investment climate, characterized by inefficient and overpriced labor imposed by the communist government, dense regulations, and an impenetrable bureaucracy, continue to deter foreign investment. Investors are also constrained by the U.S.-Cuban Liberty and Democratic Solidarity (Libertad) Act that provides sanctions for those who "traffic" in property expropriated from U.S. citizens.

In August 2010, the Cuban Government published a new law that extended the leases foreign investors could sign from 50 years to 99 years, exclusively for tourist properties. In December 2010, Cuban authorities announced that they were in talks with international firms to build up to 16 new golf courses in 2011. Currently there is only one 18-hole golf course in Varadero and one 9-hole course in Havana.

Another negative factor surfaced by the end of 2008 when the Cuban Government, facing a cash crunch, sought to renegotiate outstanding commercial debts and opted to freeze funds deposited in Cuban banks by foreign investors and suppliers. Cuba's precarious economic position is complicated by the high price it must pay for foreign financing. The Cuban Government defaulted on most of its international debt in 1986 and does not have access to credit from international financial institutions like the World Bank. Therefore, Havana must rely heavily on short-term loans to finance imports, chiefly food and fuel, and structured financial instruments tied to more stable revenue sources (e.g., nickel, tourism, and remittances). Because of its poor credit rating, an $18 billion hard currency debt, and the risks associated with Cuban investment, interest rates have reportedly been as high as 22%.

Private Sector
The small private sector has been tightly controlled and regulated, with set monthly fees paid regardless of income earned and frequent inspections yielding stiff fines for violations of any of the many self-employment regulations. In 1993 the Cuban Government legalized self-employment for some 150 occupations in an attempt to provide jobs for workers laid off due to the economic crisis brought on by the loss of Soviet subsidies and to bring some forms of black market activity into more controllable channels.

A 2004 UN Economic Commission on Latin America and the Caribbean (ECLAC) report recommended that Cuba "redesign the parameters of competition in the public, private and cooperative sectors [and] redefine the role of the state in the economy." It recommended more flexibility in self-employment regulations, property diversification, economic decentralization, and a role for the market. Rather than expanding private sector opportunities, from 2003-2007 the government stopped issuing new licenses for most categories of self-employment, and tried to squeeze more of these private sector entrepreneurs out of business. Many opted to enter the informal economy or black market, and others closed. These measures reduced private sector employment from a peak of 209,000 to 142,000 in 2009. Later moves allowed greater room for private businesses in a very limited number of areas (taxis, barber shops).

In 2010-2011, the government increased to 178 the number of authorized activities in the self-employment sector and announced other intended reforms for the private, cooperative, and state sectors.

FOREIGN RELATIONS
Cuba has an activist foreign policy and aims to find new sources of trade, aid, foreign investment, and political support, as well as to promote opposition to U.S. policy toward Cuba, in particular U.S. trade sanctions and the 1996 Libertad Act. Cuba has relations with over 160 countries and has civilian assistance workers--principally physicians and nurses--in more than 20 nations. In late 2008, Cuba was invited to join the “Rio Group” of Latin American and Caribbean countries. In 2009, Costa Rica and El Salvador re-established diplomatic relations with Cuba.

Since the end of Soviet backing, Cuba appears to have largely abandoned monetary support for guerrilla movements that typified its involvement in regional politics in Latin America and Africa, though it maintains relations with several guerrilla and terrorist groups and provides refuge for some of their members in Cuba. Cuba's support for Latin guerrilla movements, its Marxist-Leninist government, and its alignment with the U.S.S.R. led to its isolation in the hemisphere. Cuba is a member of the Organization of American States (OAS), although its present government was excluded from participation in 1962 due to incompatibility with the principles of the inter-American system. In 2009, the OAS passed a resolution that ended Cuba’s 1962 suspension, but conditioned Cuba’s re-entry into the OAS on its meeting human rights and democracy standards consistent with the principles, purposes, and practices of the OAS. Cuba has so far rejected the offer to join the OAS. Cuba hosted the Non-Aligned Movement (NAM) summit in September 2006 and held the NAM presidency until 2009.

Throughout the 1970s and 1980s, Cuba expanded its military presence abroad, spending millions of dollars in exporting revolutions; deployments reached 50,000 troops in Angola, 24,000 in Ethiopia, 1,500 in Nicaragua, and hundreds more elsewhere. In Angola, Cuban troops, supported logistically by the U.S.S.R., backed the Popular Movement for the Liberation of Angola (MPLA) in its effort to take power after Portugal granted Angola its independence. Cuban forces played a key role in Ethiopia's war against Somalia and remained there in substantial numbers as a garrison force for a decade. Cubans served in a non-combat advisory role in Mozambique and the Congo. Cuba also used the Congo as a logistical support center for Cuba's Angola mission. In the late 1980s, Cuba began to pull back militarily. Cuba unilaterally removed its forces from Ethiopia, met the timetable of the 1988 Angola-Namibia accords by completing the withdrawal of its forces from Angola before July 1991, and ended military assistance to Nicaragua following the Sandinistas' 1990 electoral defeat.

EU-Cuban diplomatic relations suffered as a result of the March 2003 crackdown on dissidents. In June 2004, EU members reacted to the crackdown by imposing restrictive measures on Cuba, inviting dissidents to national day celebrations, and suspending high-level meetings between EU members and the Cuban Government. In January 2005, the restrictions were suspended in an effort to re-engage the government as a means of advancing the EU's policy of encouraging reform while preparing for the transition. The restrictive measures were formally dropped in June 2008, but the EU established a set of criteria by which to track the Cuban Government's performance on human rights. In June 2009, it affirmed its commitment to dialogue with Cuba on political issues, but criticized continuing human rights abuses by the Cuban Government and noted that Cuba had made little progress in meeting the criteria established by the EU. The EU Foreign Affairs Council decided in October 2010 to maintain its "common position" on Cuba, but tasked the EU Foreign Affairs Chief to explore the possibilities of rapprochement. The common position will come up for reconsideration again in June 2011.

Canada maintains a robust trade and investment relationship with Cuba, with a large presence by the Canadian mining firm Sherritt Corp. Some Sherritt operations take place on property confiscated from American investors, subjecting officers of Sherritt to Libertad Act sanctions. Canada is also the largest source of foreign tourists who visit Cuba each year, reaching nearly 1 million visitors in 2010 and representing 37% of total visitors.

Spain is among the most important foreign investors in Cuba. Spanish economic involvement with Cuba is primarily centered on joint venture enterprises in tourism. Spain and Canada alternate as Cuba’s third and fourth largest trade partners behind Venezuela and China. The current Spanish government has also championed the removal of the EU's common position in exchange for bilateral agreements.

Cuba's bilateral relationship with Venezuela has helped keep the Cuban economy afloat. The "Integral Cooperation Accord" signed by Fidel Castro and Venezuelan President Hugo Chavez in October 2000 laid the groundwork for a quasi-barter exchange of Venezuelan oil for Cuban goods and services that has since become a lifeline for Cuba. For Cuba, the benefits of the cooperation accord are subsidized petroleum and increased hard currency flows. The original agreement allowed for the sale, at market prices, of up to 53,000 barrels per day of crude oil and derivatives (diesel, gasoline, jet fuel, etc.) by PDVSA, Venezuela's state-owned petroleum company, to its Cuban counterpart, CUPET. The number of barrels of oil Venezuela began selling to Cuba has risen to over 90,000 barrels daily. Under the accord, PDVSA extended preferential payment terms to CUPET, including 90-day short-term financing instead of the 30 days offered to its other customers and, in lieu of a standard letter of credit backed by an international bank, PDVSA accepted IOUs from Cuba's Banco Nacional, the central banking entity responsible for servicing Havana's foreign debt. In August 2001, Venezuelan President Hugo Chavez amended the 2000 accord to allow Venezuela to compensate the Cuban Government in hard currency for any and all Cuban products and services originally intended as in-kind payment for Venezuelan oil. As a result, Cuban exports of goods and services to Venezuela climbed from $34 million in 2001 to more than $150 million in 2003. Venezuelan ministries are contracting with Cuba for everything from generic pharmaceuticals to pre-fabricated housing and dismantled sugar mill equipment. On April 28, 2005, Chavez and Castro signed 49 economic agreements in Havana, covering areas as diverse as oil, nickel, agriculture, furniture, shoes, textiles, toys, lingerie, tires, construction materials, electricity, transportation, health, and education. Venezuela is also committed to sending more than $400 million in various products duty-free to Cuba and plans to open an office of state-owned commercial Venezuelan Industrial Bank (BIV) in Havana to finance imports and exports between the two countries, while Cuba will open an official Banco Exterior de Cuba in Caracas. Increased economic engagement along with the rapid growth in Cuban sales to Caracas has established Venezuela as one of the island's largest export markets. In 2009, Venezuela sent more than 115,000 barrels of oil to Cuba, although not all under this accord.

A series of economic agreements between Cuba and China have strengthened trade between the two countries. Sino-Cuban trade totaled more than $525 million in 2004, according to China Customs statistics. This represents an increase of more than 47% over 2003. Most of China's aid involves in-kind supply of goods or technical assistance. During President Hu-Jintao's visit to Cuba in November 2004, China signed investment-related memorandums of understanding (MOUs) estimated at more than $500 million, according to press reports. In 2009, China announced $600 million in loans and agreements. The agreements included a $260 million loan to purchase 10 bulk carriers, $300 million to improve Cuba’s telecommunications network, $9 million for Cuban television, and a $1 million line of credit for Cuban-determined projects.

The Russian prime minister visited Cuba in October 2006, signaling a new effort to expand trade and investment, albeit financed by Russian credit. Russia set aside, for the moment, more than U.S. $20 billion in Soviet-era debt, restructured post-1991 debt, and extended a new credit line to Cuba. The new credit line is for U.S. $355 million repayable over 10 years at an interest rate of 5%. The new credit is conditioned in that it must be used to purchase Russian cars, trucks, and planes, as well as to finance Cuban energy and transport infrastructure projects, including air navigation systems. Russia further agreed to restructure U.S. $166 million in debt accumulated since 1993. Both nations also signed an agreement on military equipment and technical services. Raul Castro made a state visit to Russia in February 2009 during which several additional trade agreements were signed.

U.S.-CUBAN RELATIONS
U.S. policy toward Cuba is focused on encouraging democratic and economic reforms and increased respect for human rights on the part of the Cuban Government. President Obama has taken several steps to reach out to the Cuban people in support of their desire to freely determine their country’s future. In April 2009, the United States announced the lifting of restrictions on family travel and remittances to Cuba, expanded the list of items eligible for humanitarian export to Cuba, and announced new regulations for U.S. telecommunications companies to expand the flow of information to Cuba. In July 2009, the United States and Cuba resumed biannual migration talks after a 6-year lapse. In January 2011, the United States announced regulatory changes that increase purposeful travel including religious, cultural, educational, and people-to-people travel; expand the individuals and groups eligible to send and receive remittances; and allow all U.S. international airports to apply to provide charter services to Cuba (previously only three airports were authorized). Though Cuba is subject to trade sanctions, the United States remains Cuba’s largest source of food and humanitarian aid. The United States is committed to supporting safe, orderly, and legal migration from Cuba through the effective implementation of the 1994-95 U.S.-Cuba Migration Accords.

Travel to Cuba is restricted by U.S. regulations to licensed travelers engaged in a set of specified activities. All U.S. travel to Cuba must be licensed by the Department of Treasury's Office of Foreign Assets Control (OFAC), and must fall into one of 12 categories. Further information on the licensing process can be obtained from OFAC or at its website. Those contemplating a visit to Cuba should consult the consular information about the country.

All exports to Cuba must also be licensed by the Commerce Department's Bureau of Industry and Security (BIS). Further information on exports to Cuba can be found at the BIS website.

Principal U.S. Interests Section Officials
Chief of Mission--Jonathan Farrar
Deputy Chief of Mission--Charles Barclay
Political/Economic Counselor--Joaquin Monserrate
Consul General--Martha Melzow
Public Affairs Officer--Gloria Berbena
Management Officer--Tom Canahuate

The U.S. Interests Section is located at Calzada between L & M Streets, Vedado, Havana, switchboard: (53-7) 33-3551-3559, fax/general: 33-3700; Public Affairs: 33-3967, fax: 33-3869; hours: 8:30 a.m. to 5:00 p.m. Emergencies/after hours: 33-3026.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Madagascar

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May 3, 2011Bureau of African Affairs

Background Note: Madagascar



Official Name: Republic of Madagascar



PROFILE

Geography
Area: 592,800 sq. km. (228,880 sq. mi.).
Cities: Capital--Antananarivo (pop. about 1,300,000). Other cities--Antsirabe (about 500,000), Mahajanga (about 400,000), Toamasina (about 450,000).
Terrain: Mountainous central plateau, coastal plain.
Climate: Moderate interior, tropical coasts.

People
Nationality: Noun and adjective--Malagasy.
Population (2010 estimate): 20.1 million.
Annual population growth rate (2009 estimate): 2.7%.
Ethnic groups: 18 Malagasy tribes; small groups of Comorans, French, Indians, and Chinese.
Religions: Traditional beliefs 52%, Christian 41%, Muslim 7%.
Languages: Malagasy (official), French (official), English (official).
Education: Years compulsory--5. Literacy--64%.
Health: Infant mortality rate--41/1,000. Life expectancy--61 years (men), 64 years (women).

Government
Type: Republic.
Independence: June 26, 1960.
Constitution: Entered into force in March 1998.
Branches: Executive--president, prime minister, cabinet. Judicial--Supreme Court, High Court of Justice, Constitutional High Court. Legislative--National Assembly and Senate.

NOTE: On March 17, 2009, democratically elected President Marc Ravalomanana stepped down and purported to transfer his authority to a senior military figure, who in turn purported to confer the presidency on opposition leader Andry Rajoelina, who is currently heading the High Transitional Authority (HAT). The United States characterized the transfer of power as tantamount to a military coup d’etat and does not recognize the HAT. References to de facto government officials in this text are factual only and do not reflect U.S. recognition of the HAT regime.

Suffrage: Universal at 18.
National holiday: June 26.

Economy
GDP (U.S.$, 2009 est., official exchange rate): $8.6 billion.
GDP per capita (2009 est., official exchange rate): $438.
GNI per capita (2009 est., purchasing power parity): $990.
Unemployment: no reliable data available.
Natural resources: Graphite, chrome, coal, bauxite, ilmenite, nickel, gold, oil, tar sands, uranium, precious and semiprecious stones, and hardwoods.
Agriculture (29% of GDP, 2009 est.): Products--rice, livestock, seafood, coffee, vanilla, sugar, cloves, cotton, sisal, peanuts, and tobacco.
Industry (15.9% of GDP, 2008 est.): Types--processed food, clothing, textiles, mining, paper, refined petroleum products, glassware, construction, soap, cement, tanning.
Trade: Exports (28% of GDP, 2009 est.): vanilla, coffee, cloves, shrimp, graphite, essential oils, apparel, industrial minerals and gemstones. Major export markets--France, U.S., Germany, Italy, U.K. Imports (52% of GDP, 2009 est.): foodstuffs, fuel and energy, capital goods, vehicles, consumer goods and electronics. Major suppliers--France, China, Iran, Mauritius, Hong Kong.

PEOPLE AND HISTORY
Madagascar's population is predominantly of mixed Asian and African origin. Research suggests that the island was uninhabited until Indonesian seafarers arrived in roughly the first century A.D., probably by way of southern India and East Africa, where they acquired African wives and slaves. Subsequent migrations from both the Pacific and Africa further consolidated this original mixture, and 18 separate tribal groups emerged. Asian features are most predominant in the central highlands people, the Merina (3 million) and the Betsileo (2 million); the coastal people are of more clearly African origin. The largest coastal groups are the Betsimisaraka (1.5 million) and the Tsimihety and Sakalava (700,000 each).

The Malagasy language is of Malayo-Polynesian origin and is generally spoken throughout the island, with significant regional variations. French is spoken among the educated population of this former French colony. English is becoming more widely spoken, and in 2003 the government began a pilot project of introducing the teaching of English into the primary grades of 44 schools, with hopes of taking the project nationwide. In 2010, however, the de facto government introduced measures that would limit the use and teaching of English.

Most people practice traditional religions, which tend to emphasize links between the living and the dead. They believe that the dead join their ancestors in the ranks of divinity and that ancestors are intensely concerned with the fate of their living descendants. The Merina and Betsileo reburial practice of famadihana, or "turning over the dead" celebrates this spiritual communion. In this ritual, relatives' remains are removed from the family tomb, rewrapped in new silk shrouds, and returned to the tomb following festive ceremonies in their honor.

About 41% of the Malagasy are Christian, divided almost evenly between Roman Catholic and Protestant. Many incorporate the cult of the dead with their religious beliefs and bless their dead at church before proceeding with the traditional burial rites. They also may invite a pastor to attend a famadihana. While many Christians continue these practices, others consider them to be superstitions that should be abandoned. Many of the Christian churches are influential in politics. In the coastal regions of the provinces of Mahajanga and Antsiranana (Diego Suarez), Muslims constitute a significant minority. Muslims are divided between those of Malagasy ethnicity, Indo-Pakistanis, and Comorans.

The written history of Madagascar began in the seventh century A.D., when Arabs established trading posts along the northwest coast. European contact began in the 1500s, when Portuguese sea captain Diego Dias sighted the island after his ship became separated from a fleet bound for India. In the late 17th century, the French established trading posts along the east coast. From about 1774 to 1824, it was a favorite haunt for pirates, including Americans, one of whom brought Malagasy rice to South Carolina.

Beginning in the 1790s, Merina rulers succeeded in establishing hegemony over the majority of the island, including the coast. In 1817, the Merina ruler and the British governor of Mauritius concluded a treaty abolishing the slave trade, which had been important in Madagascar's economy. In return, the island received British military and financial assistance. British influence remained strong for several decades, during which the Merina court was converted to Presbyterianism, Congregationalism, and Anglicanism.

The British accepted the imposition of a French protectorate over Madagascar in 1885 in return for eventual control over Zanzibar (now part of Tanzania) and as part of an overall definition of spheres of influence in the area. Absolute French control over Madagascar was established by military force in 1895-96, and the Merina monarchy was abolished.

Malagasy troops fought in France, Morocco, and Syria during World War I. After France fell to the Germans in World War II, the Vichy government administered Madagascar. British troops occupied the strategic island in 1942 to preclude its seizure by the Japanese. The Free French received the island from the United Kingdom in 1943.

In 1947, with French prestige at a low ebb, a nationalist uprising was suppressed after several months of bitter fighting. The French subsequently established reformed institutions in 1956 under the Loi Cadre (Overseas Reform Act), and Madagascar moved peacefully toward independence. The Malagasy Republic was proclaimed on October 14, 1958, as an autonomous state within the French Community. A period of provisional government ended with the adoption of a constitution in 1959 and full independence on June 26, 1960.

GOVERNMENT
The principal institutions of the Republic of Madagascar are a presidency, a parliament, a prime ministry and cabinet, and an independent judiciary. The president is elected by direct universal suffrage for a 5-year term, renewable twice. The last presidential election was held on December 3, 2006. There is currently no legitimate sitting president in Madagascar.

In Madagascar, the parliament has two chambers; the National Assembly and the Senate. The last National Assembly election was held on September 23, 2007, and marked a significant reform to the parliament. The National Assembly previously had 160 members, elected for a 4-year term in single-member and two-member constituencies. However, in July 2007, just before the National Assembly elections, a council of ministers agreed to reduce the number of parliamentarians from 160 to 127. Consequently, few of the 116 districts elected more than one member. Antananarivo's six districts, however, each elected two deputies. The Senate has 33 members, with 22 members elected for a 6-year term, 1 for each province by provincial electors, and 11 members appointed by the president. Following the 2009 coup d'etat, the Malagasy National Assembly and Senate were dissolved by the de facto authorities. Thus, there is currently no legitimate legislative body in Madagascar.

The prime minister and members of parliament initiate legislation, and the government executes it. The president can dissolve the National Assembly. For its part, the National Assembly can pass a motion of censure and require the prime minister and council of ministers to step down. The Constitutional Court approves the constitutionality of new laws.

In an effort to decentralize administration, the country's six provinces were dissolved in the constitutional referendum of 2007, in favor of 22 regions designated previously in 2004. Decentralization is an ongoing process, and has been a key element of Madagascar's development plans.

Principal Government Officials
HAT (High Transitional Authority) President--Andry Nirina RAJOELINA
HAT Prime Minister--Camille Albert VITAL
HAT Minister of State for Economy and Industry--Pierrot RAJAONARIVELO
HAT Minister of State for Relations with Institutions--Yves Aime RAKOTOARISOA
HAT Minister of Foreign Affairs--Yvette SYLLA
HAT Minister of Finance and Budget--Hery RAJAONARIMAMPIANINA
HAT Minister of Mines and Hydrocarbons--Mamy RATOVOMALALA
HAT Minister of Defense--Division General Lucien RAKOTOARIMASY
HAT Minister of Commerce and Trade--Irene Eva RAZAFIMANDIMBY RINASOA
HAT Minister of Justice--Christine Harijaona RAZANAMAHASOA
HAT Minister of Environment, Water and Forests--Herilanto RAVELOHARISON
HAT Minister of Internal Security--Dieudonne RANAIVOSON
HAT Minister of National Education--Jean Jacques RABENIRINA
HAT Minister of Tourism--Riana ANDRIAMANDAVY VII

Ambassador to the U.S.--vacant
Ambassador to the UN--Zina Andrianarivelo-Razafy

Madagascar maintains an embassy in the United States at 2374 Massachusetts Avenue NW, Washington, DC 20008 (tel. 202-265-5525).

POLITICAL CONDITIONS
Madagascar's first President, Philibert Tsiranana, was elected when his Social Democratic Party gained power at independence in 1960 and was reelected without opposition in March 1972. However, he resigned only 2 months later in response to massive antigovernment demonstrations. The unrest continued, and Tsiranana's successor, Gen. Gabriel Ramanantsoa, resigned on February 5, 1975, handing over executive power to Lt. Col. Richard Ratsimandrava, who was assassinated 6 days later. A provisional military directorate then ruled until a new government was formed in June 1975, under Didier Ratsiraka.

During the 16 subsequent years of President Ratsiraka's rule, Madagascar's government was committed to revolutionary socialism based on the 1975 constitution that established a highly centralized state. Elections in 1982 and 1989 returned Ratsiraka for a second and third 7-year presidential term. For much of this period, only limited and restrained political opposition was tolerated, with no direct criticism of the president permitted in the press.

In the late 1980s, the Ratsiraka regime came under increasing pressure to make fundamental changes. With a deteriorating economy, mass demonstrations, and crippling general strikes, the limited economic and political reforms Ratsiraka enacted were insufficient to placate a growing opposition movement known as Hery Velona or "Active Forces." A number of already existing political parties and their leaders, among them Albert Zafy and Rakotoniaina Manandafy, anchored this movement. In a bid to placate this opposition, Ratsiraka replaced his prime minister in August 1991 but suffered an irreparable setback soon thereafter when his troops fired on peaceful demonstrators marching on his suburban palace, killing more than 30. In an increasingly weakened position, Ratsiraka acceded to negotiations on the formation of a transitional government.

The resulting "Panorama Convention" of October 31, 1991, stripped Ratsiraka of nearly all of his powers, created interim institutions, and set an 18-month timetable for completing a transition to a new form of constitutional government. The High Constitutional Court was retained as the ultimate judicial arbiter of the process. In March 1992, a widely representative National Forum organized by the Malagasy Christian Council of Churches (FFKM) drafted a new constitution, which was put to a nationwide referendum in August 1992 and approved by a wide margin, despite efforts by pro-Ratsiraka "federalists" to disrupt balloting in several coastal areas.

Presidential elections were held on November 25, 1992, after the High Constitutional Court had ruled, over "Active Forces" objections, that Ratsiraka could become a candidate. Runoff elections were held in February 1993, and the leader of the Hery Velona movement, Albert Zafy, defeated Ratsiraka. Zafy was sworn in as President on March 27, 1993. After President Zafy's impeachment by the National Assembly in 1996 and the short quasi-presidency of Norbert Ratsirahonana, the 1997 elections once again pitted Zafy and Ratsiraka, with Ratsiraka this time emerging victorious. A National Assembly, dominated by members of President Ratsiraka'a political party AREMA, subsequently passed the 1998 constitution, which considerably strengthened the presidency.

In December 2001, a presidential election was held in which both major candidates claimed victory. The Ministry of the Interior declared incumbent Ratsiraka of the AREMA party victorious. Marc Ravalomanana contested the results and claimed victory. A political crisis followed in which Ratsiraka supporters cut major transport routes from the primary port city to the capital city, a stronghold of Ravalomanana support. Sporadic violence and considerable economic disruption continued until July 2002 when Ratsiraka and several of his prominent supporters fled to exile in France. In addition to political differences, ethnic differences played a role in the crisis and continue to play a role in politics. Ratsiraka is from the coastal Betsimisaraka tribe and Ravalomanana comes from the highland Merina tribe.

After the end of the 2002 political crisis, President Ravalomanana began many reform projects, forcefully advocating "rapid and durable development" and launching a battle against corruption. December 2002 legislative elections gave his newly formed TIM (Tiako-i-Madagasikara--I Love Madagascar) Party a commanding majority in the National Assembly. November 2003 municipal elections were conducted freely, returning a majority of supporters of the president, but also significant numbers of independent and regional opposition figures.

On March 17, 2009, after a period of demonstrations in the capital, President Ravalomanana signed power over to the military, which in turn conferred the presidency on opposition leader Andry Rajoelina, the elected mayor of Antananarivo and leader of the demonstrations. Rajoelina declared himself “President of the High Transitional Authority” and pledged to hold presidential elections by October 2010 (a pledge that he did not fulfill), following a constitutional referendum and revision of the electoral code. The United States has condemned the unconstitutional and undemocratic change of power in Madagascar and considers the series of events of early 2009 that led to the installation of the de facto leadership to be a military coup d’etat.

ECONOMY
Structural reforms began in the late 1980s, initially under pressure from international financial institutions. An initial privatization program (1988-1993) and the development of an export processing zone (EPZ) regime in the early 1990s were key milestones in this effort. A period of significant stagnation from 1991-96 was followed by 5 years of solid economic growth and accelerating foreign investment, driven by a second wave of privatizations and EPZ development. Although structural reforms advanced, governance remained weak and perceived corruption in Madagascar was extremely high. During the period of solid growth from 1997 through 2001, poverty levels remained stubbornly high, especially in rural areas. A 6-month political crisis triggered by a dispute over the outcome of the presidential elections held in December 2001 virtually halted economic activity in much of the country in the first half of 2002.

Following the 2002 political crisis, in coordination with international financial institutions and the donor community, the government attempted to set a new policy course and build business confidence. Madagascar developed a recovery plan in collaboration with the private sector and donors and presented it at a 2002 "Friends of Madagascar" conference in Paris organized by the World Bank. Donor countries demonstrated their confidence in the new government by pledging $1 billion in assistance over 5 years. The Malagasy Government identified road infrastructure as its principal priority and underlined its commitment to public-private partnership by establishing a joint public-private sector steering committee.

In 2000, Madagascar prepared a Poverty Reduction Strategy Paper (PRSP) under the Heavily Indebted Poor Countries (HIPC) Initiative. The boards of the International Monetary Fund (IMF) and World Bank agreed in December 2000 that the country had reached the decision point for debt relief under the HIPC Initiative and defined a set of conditions for Madagascar to reach the completion point. In October 2004, the boards of the IMF and the World Bank determined that Madagascar had reached the completion point under the enhanced HIPC Initiative.

The Madagascar-U.S. Business Council was formed in Madagascar in 2002. The U.S.-Madagascar Business Council was formed in the United States in May 2003, and the two organizations continue to explore ways to work for the benefit of both groups. An American Chamber of Commerce was launched at the end of 2008 and remains active even after the 2009 coup d’etat.

Madagascar’s ongoing political crisis continues to negatively impact key economic indicators and the business sector. The actions of the HAT regime forced the United States under existing law to withdraw African Growth and Opportunity Act (AGOA) eligibility from Madagascar at the end of 2009, a situation which resulted in the loss of thousands of jobs. Parts of the country have returned to a barter economy, reports indicate many laid-off workers have reverted to the informal sector, and standards of living have declined since the coup.

FOREIGN RELATIONS
Madagascar, which has historically been perceived as on the margin of mainstream African affairs, eagerly rejoined the African Union (AU) in July 2003 after a 14-month hiatus triggered by the 2002 political crisis, and joined the Southern African Development Community (SADC) in 2006. From 1978 until 1991, then-President Ratsiraka emphasized independence and nonalignment and followed an "all points" policy stressing ties with socialist and radical regimes, including North Korea, Cuba, Libya, and Iran. Taking office in 1993, President Albert Zafy expressed his desire for diplomatic relations with all countries. Early in his tenure, he established formal ties with South Korea and sent emissaries to Morocco.

Starting in 1997, globalization encouraged the government and President Ratsiraka to adhere to market-oriented policies and to engage world markets. External relations reflected this trend, although Madagascar's physical isolation and strong traditional insular orientation have limited its activity in regional economic organizations and relations with its East African neighbors. During his term, President Ravalomanana welcomed relations with all countries interested in helping Madagascar to develop. He consciously sought to strengthen relations with Anglophone countries as a means of balancing a historically strong French influence.

Following the 2009 coup d’etat, Madagascar was suspended from participating in AU and SADC activities until constitutional order is restored. Most donors in Madagascar, including the United States and the European Union, have suspended assistance programs to the Government of Madagascar. The United States currently undertakes only humanitarian assistance programs that have a direct impact on civilian populations in need. The AU formed an International Contact Group to coordinate international community action to ensure a return to constitutional rule as quickly as possible, and SADC appointed former Mozambican President Joaquim Chissano as a mediator in the effort to find a consensual, negotiated solution to the ongoing political crisis. Additionally, the AU and others have enacted certain targeted sanctions or travel restrictions on members of the HAT regime who are impeding a return to free, fair, and durable democracy in Madagascar.

U.S.-MALAGASY RELATIONS
Relations with the United States date to the mid-1800s. The two countries concluded a commercial convention in 1867 and a treaty of peace, friendship, and commerce in 1881. Traditionally warm relations suffered considerably during the 1970s, when Madagascar expelled the U.S. ambassador, closed a NASA tracking station, and nationalized two U.S. oil companies. In 1980, relations at the ambassadorial level were restored.

Throughout the troubled period, commercial and cultural relations remained active. In 1990, Madagascar was designated as a priority aid recipient, and assistance increased from $15 million in 1989 to $40 million in 1993. More recently, Madagascar was one of the first countries to qualify for the African Growth and Opportunity Act (AGOA) "Wearing Apparel" provisions, allowing the growth of a significant textile and garments export sector in Madagascar. Unfortunately, the coup d'etat that brought Rajoelina and the HAT regime to power, followed by Rajoelina's rejection of mediation efforts in December 2009, rendered Madagascar ineligible for AGOA under the economic and political governance criteria necessary for eligibility.

U.S. assistance in Madagascar has contributed to a population census and family planning programs; conservation of Madagascar's remarkable biodiversity; private sector development; agriculture; democracy and governance initiatives; and media training. Madagascar became the very first country with a Millennium Challenge Account compact when it signed an agreement worth $110 million in April 2006, although the compact was terminated due to the 2009 coup d’etat and resulting ongoing political crisis.

The United States considers the series of events in Madagascar in early 2009 to be a military coup d’etat and, as a result, has suspended all assistance programs that directly benefit the government as well as all non-humanitarian assistance to Madagascar. The United States’ intent is to support international efforts led by SADC and the AU to ensure that a credible electoral process takes place as soon as possible, organized by an independent entity.

U.S. Embassy Officials
Ambassador--vacant
Deputy Chief of Mission--Eric Stromayer, Charge d'Affaires, ad interim
USAID Director--Rudolph Thomas
Defense Attache--CAPT John Ries
Public Affairs Officer--Brett Bruen
Consular Officer--Jane Gamble
Economic/Commercial Section Chief--Glenn Fedzer
Political Officer--Richard A. Allen
Management Officer--Alfred Braswell
Peace Corps Country Director--John Reddy

The U.S. Embassy in Madagascar is located at Lot 207 A. Point Liberty, Andranoro, Antehiroka, Antananarivo (tel. 261-20-23-480 00/01, 261-33-443-2000; fax 261-33-443-2817. The postal address is Ambassade Americaine, B.P. 620, Antananarivo, Madagascar.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Solomon Islands

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May 4, 2011Bureau of East Asian and Pacific Affairs

Background Note: Solomon Islands



Official Name: Solomon Islands



PROFILE

Geography
Area: Land--27,556 sq. km. (11,599 sq. mi.). Archipelago--725,197 sq. km. (280,000 sq. mi.).
Cities: Capital--Honiara (on the island of Guadalcanal), pop. 66,000 (2007). Other towns--Gizo, Auki, Kirakira.
Terrain: Mountainous islands.
Climate: Tropical monsoon.

People
Nationality: Noun and adjective--Solomon Islander(s).
Population (2010): 539,000.
Annual population growth rate (2010): 2.3%.
Ethnic groups (2010): Melanesian 93%, Polynesian 4%, Micronesian 1.5%, other 1.5%.
Religions: Christian 92%--more than one-third Anglican (Archdiocese of Melanesia) 32.8%, Roman Catholic 19%, South Sea Evangelical 17%, United Church (Methodist) 10.3%, Seventh-day Adventist 11.2%.
Languages: English (official); about 120 vernaculars, including Solomon Islands pidgin.
Education (2010): Years compulsory--none. Attendance--79.6% primary school; 14% secondary school. Adult literacy--76.6%.
Health (2010): Infant mortality rate--37/1,000. Life expectancy (2010)--76 yrs.
Work force (202,500; 2009): Agriculture--75%. Industry and commerce--5%. Services--20%.

Government
Type: Parliamentary democracy within the Commonwealth.
Constitution: May 1978.
Independence: July 7, 1978.
Branches: Executive--Queen Elizabeth II (head of state, represented by a governor general); prime minister (head of government). Legislative--50-member Parliament elected every 4 years. Judicial--high court plus magistrates court; system of custom land courts throughout islands.
Subdivisions: Nine provinces and Honiara town.
Major political parties: Association of Independent Members (AIM), People's Alliance Party (PAP), Socred, Rural Advancement Party (RAP), Lafari Party, Christian Alliance Party, Democratic Party, National Party, Liberal Party, Labor Party.
Suffrage: Universal over 18.
National holiday: July 7.

Economy
GDP (2009): $564 million.
Annual growth rate (2010): 4.0%.
Per capita income (2009): $1,047.
Avg. inflation rate (2010): 3.0%.
Natural resources: Forests, fish, agricultural land, marine products, gold.
Agriculture: Products--copra, cocoa, palm oil, palm kernels and subsistence crops of yams, taro, bananas, pineapple.
Industry: Types--fish canning, sawmilling, boats, rattan and wood furniture, fiberglass products, shell jewelry, tobacco, beer, clothing, soap, nails, handicrafts.
Trade (December 2009): Exports--$322.1 million: timber, fish, cocoa, copra, palm oil. Major markets--China 50.2%, South Korea 5.7%, Thailand 3.3%, Japan 1.8%, Philippines 5.6%, Italy 3.4%, Spain 4.5%. Imports--$305.5 million: mineral fuels, food, machinery and transport equipment, and basic manufactures. Major suppliers--Australia 22.7%, Singapore 24.3%, New Zealand 4.9%, Fiji 4.4%, Papua New Guinea 4.3%, China 3.8%, Japan 3.1%.
Average exchange rate (2009): U.S. $1 = SBD 8.05.

GEOGRAPHY
Solomon Islands forms an archipelago in the Southwest Pacific about 1,900 kilometers (1,200 mi.) northeast of Australia. With terrain ranging from ruggedly mountainous islands to low-lying coral atolls, Solomon Islands stretches in a 1,450-kilometer (900 mi.) chain southeast from Papua New Guinea across the Coral Sea to Vanuatu.

The main islands of Choiseul, New Georgia, Santa Isabel, Guadalcanal, Malaita, and Makira have rainforested mountain ranges of mainly volcanic origin, deep narrow valleys, and coastal belts lined with coconut palms and ringed by reefs. The smaller islands are atolls and raised coral reefs, often spectacularly beautiful. The region is geologically active, and earth tremors are frequent.

The islands' ocean-equatorial climate is extremely humid throughout the year, with a mean temperature of 27° C (80° F) and few extremes of temperature or weather. June through August is the cooler period. Though seasons are not pronounced, the northwesterly winds of November through April bring more frequent rainfall and occasional squalls or cyclones. The annual rainfall is about 305 centimeters (120 in.).

More than 90% of the islands traditionally were forested, but this has come under severe pressure from current logging operations. The coastal strips are sheltered by mangrove and coconut trees. Luxuriant rainforest covers the interiors of the large islands. Soil quality ranges from extremely rich volcanic to relatively infertile limestone. More than 230 varieties of orchids and other tropical flowers brighten the landscape.

PEOPLE
Solomon Islanders comprise diverse cultures, languages, and customs. Ninety-three percent are Melanesian, 4% Polynesian, and 1.5% Micronesian. In addition, small numbers of Europeans and Chinese are registered. About 120 vernacular languages are spoken.

Most people reside in small, widely dispersed settlements along the coasts. Sixty percent live in localities with fewer than 200 persons, and only 17% reside in urban areas.

The capital city of Honiara, situated on Guadalcanal, the largest island, has 66,000 inhabitants. The other principal towns are Gizo, Auki, and Kirakira.

Most Solomon Islanders are Christian, with the Anglican, Roman Catholic, South Seas Evangelical, and Seventh-day Adventist faiths predominating. About 5% of the population maintains traditional beliefs.

The chief characteristics of the traditional Melanesian social structure are:

  • The practice of subsistence economy;
  • The recognition of bonds of kinship, with important obligations extending beyond the immediate family group; local and clan loyalties far outweigh regional or national affiliations.
  • Generally egalitarian relationships, emphasizing acquired rather than inherited status; and
  • A strong attachment of the people to the land.

Most Solomon Islanders maintain this traditional social structure and find their roots in village life.

HISTORY
Although little prehistory of Solomon Islands is known, material excavated on Santa Ana, Guadalcanal, and Gawa indicates that a hunter-gatherer people lived on the larger islands as early as 1000 B.C. Some Solomon Islanders are descendants of Neolithic Austronesian-speaking peoples who migrated from Southeast Asia.

The European discoverer of Solomon Islands was the Spanish explorer Alvaro de Mendana Y Neyra, who set out from Peru in 1567 to seek the legendary Isles of Solomon. British mariner Philip Carteret entered Solomon waters in 1767. In the years that followed, visits by explorers were more frequent.

Missionaries began visiting Solomon Islands in the mid-1800s. They made little progress at first, because "blackbirding"--the often brutal recruitment of laborers for the sugar plantations in Queensland and Fiji--led to a series of reprisals and massacres. The evils of the labor trade prompted the United Kingdom to declare a protectorate over the southern Solomons in 1893. In 1898 and 1899, more outlying islands were added to the protectorate; in 1900 the remainder of the archipelago, an area previously under German jurisdiction, was transferred to British administration. Under the protectorate, missionaries settled in Solomon Islands, converting most of the population to Christianity.

In the early 20th century, several British and Australian firms began large-scale coconut planting. Economic growth was slow, however, and the islanders benefited little. With the outbreak of World War II, most planters and traders were evacuated to Australia, and most cultivation ceased.

From May 1942, when the Battle of the Coral Sea was fought, until December 1943, the Solomons were almost constantly a scene of combat. Although U.S. forces landed on Guadalcanal virtually unopposed in August 1942, they were soon engaged in a bloody fight for control of the islands' airstrip, which the U.S. forces named Henderson Field. One of the most furious sea battles ever fought took place off Savo Island, near Guadalcanal, also in August 1942. Before the Japanese completely withdrew from Guadalcanal in February 1943, over 7,000 Americans and 21,000 Japanese died. By December 1943, the Allies were in command of the entire Solomon chain. The large-scale American presence toward the end of the war, which dwarfed anything seen before in the islands, triggered various millennial movements and left a lasting legacy of friendship.

Postwar Developments
Following the end of World War II, the British colonial government returned. The capital was moved from Tulagi to Honiara to take advantage of the infrastructure left behind by the U.S. military. A native movement known as the Marching Rule defied government authority. There was much disorder until some of the leaders were jailed in late 1948. Throughout the 1950s, other indigenous dissident groups appeared and disappeared without gaining strength.

In 1960, an advisory council of Solomon Islanders was superseded by a legislative council, and an executive council was created as the protectorate's policymaking body. The council was given progressively more authority.

In 1974, a new constitution was adopted establishing a parliamentary democracy and ministerial system of government. In mid-1975, the name Solomon Islands officially replaced that of British Solomon Islands Protectorate. On January 2, 1976, Solomon Islands became self-governing, and independence followed on July 7, 1978.

GOVERNMENT
Solomon Islands is a parliamentary democracy within the Commonwealth, with a unicameral Parliament and a ministerial system of government. Queen Elizabeth II is represented by a governor general, chosen by the Parliament for a 5-year term. The national Parliament has 50 members, elected for 4-year terms. However, Parliament may be dissolved by majority vote of its members before the completion of its term. Parliamentary representation is based on single-member constituencies. Suffrage is universal for citizens over age 18. The prime minister, elected by Parliament, chooses the other members of the cabinet. Each ministry is headed by a cabinet member, who is assisted by a permanent secretary, a career public servant, who directs the staff of the ministry.

For local government, the country is divided into 10 administrative areas, of which nine are provinces administered by elected provincial assemblies, and the 10th is the town of Honiara, administered by the Honiara Town Council.

Land ownership is reserved for Solomon Islanders. At the time of independence, citizenship was granted to all persons whose parents are or were both British protected persons and members of a group, tribe, or line indigenous to Solomon Islands. The law provides that resident expatriates, such as the Chinese and Kiribati, may obtain citizenship through naturalization. Land generally is still held on a family or village basis and may be handed down from mother or father according to local custom. The islanders are reluctant to provide land for nontraditional economic undertakings, and this has resulted in continual disputes over land ownership.

No military forces are maintained by the Solomon Islands, although the police force of 1,059 includes a border protection element. The police also have responsibility for fire service, disaster relief, and maritime surveillance. The police force is headed by a commissioner, appointed by the governor general and responsible to the prime minister. Peter Marshall, a New Zealander, was appointed as police commissioner in May 2008. His contract ended in early 2011 and Walter Kola, a local official, has been acting police commissioner since then.

POLITICAL CONDITIONS
Solomon Islands governments are characterized by weak political parties and highly unstable parliamentary coalitions. They are subject to frequent votes of no confidence, and government leadership changes frequently as a result. Cabinet changes are common.

The first post-independence government was elected in August 1980. Prime Minister Peter Kenilorea was head of government until September 1981, when he was succeeded by Solomon Mamaloni as the result of a realignment within the parliamentary coalitions. Following the November 1984 elections, Kenilorea was again elected Prime Minister, to be replaced in 1986 by his former deputy Ezekiel Alebua following shifts within the parliamentary coalitions. The next election, held in early 1989, returned Solomon Mamaloni as Prime Minister. Francis Billy Hilly was elected Prime Minister following the national elections in June 1993, and headed the government until November 1994 when a shift in parliamentary loyalties brought Solomon Mamaloni back to power. The national election of August 6, 1997 resulted in Bartholomew Ulufa'alu's election as Prime Minister, heading a coalition government, which christened itself the Solomon Islands Alliance for Change.

However, governance was slipping as the performance of the police and other government agencies deteriorated due to ethnic rivalries. The capital of Honiara on Guadalcanal was increasingly populated by migrants from the island of Malaita. In June 2000, an insurrection mounted by militants from the island of Malaita resulted in the brief detention of Ulufa'alu and his subsequent forced resignation. Manasseh Sogavare, leader of the People's Progressive Party, was chosen Prime Minister by a loose coalition of parties. Guadalcanal militants retaliated and sought to drive Malaitan settlers from Guadalcanal, resulting in the closure of a large oil-palm estate and gold mine which were vital to exports but whose workforce was largely Malaitan.

New elections in December 2001 brought Sir Allan Kemakeza into the Prime Minister's chair with the support of a coalition of parties. Kemakeza attempted to address the deteriorating law and order situation in the country, but the prevailing atmosphere of lawlessness, widespread extortion, and ineffective police prompted a formal request by the Solomon Islands Government for outside help. With the country bankrupt and the capital in chaos, the request was unanimously supported in Parliament.

The Regional Assistance Mission to the Solomon Islands (RAMSI), a multinational police-centered force organized by Australia, arrived in the country in 2003 at the government's invitation to assist in restoring law and order and rebuilding the country's institutions. The peace proved to be fragile, and fierce rioting occurred soon after the April 2006 general election and the election of Snyder Rini as Prime Minister in mid-April. Most of the violence was directed against businesses owned by ethnic Chinese in Honiara, with the almost complete destruction of the Chinatown commercial district. Rini resigned shortly after the riots, and a parliamentary vote saw Manasseh Sogavare elected as the new Prime Minister in May 2006. The civilian authorities generally maintained effective control of the security forces.

Relations between RAMSI and the Sogavare government were increasingly strained after the controversial July 2007 appointment of Julian Moti, wanted by Australia on child sex offense charges, as attorney general. On December 13, Prime Minister Manasseh Sogavare's coalition government lost a parliamentary vote of no confidence, and on December 20, Parliament elected Derek Sikua as Prime Minister. In December 2007 the Sikua government dismissed Moti and deported him to Australia. Australian Prime Minister Kevin Rudd's visit to the Solomon Islands in March 2008 began a new era of bilateral relations. Sikua served as Prime Minister until the dissolution of Parliament on April 24, 2010 for national elections. The elections were held in August 2010 and veteran politician Danny Philip was elected Prime Minister by a majority of one. The next national elections will be held in 2014.

Principal Government Officials
Governor General--Frank Kabui
Prime Minister--Danny Philip
Minister for Foreign Affairs--Peter Shanel
Ambassador to the U.S. and UN--Colin Beck

The Solomon Islands mission to the United Nations is located at 800 Second Avenue, Suite 400L, New York, NY 10017 (tel: 212-599-6192/93; fax: 212-661-8925).

ECONOMY
In 2010 the economy recovered and grew by an estimated 4.0%, after contracting by 2.2% in 2009 because of the global financial crisis. Overall production in 2010 returned to 2008 levels according to the Central Bank of the Solomon Islands. This was largely due to the increase in international prices and demand for logs, especially in late 2010, as well as increases in international prices for Solomon Islands’ cash crops (with the exception of cocoa).

More than 75% of Solomon Islands’ labor force engages in subsistence farming and fishing. Until 1998, when world prices for tropical timber fell steeply, timber was Solomon Islands' main export product, and, in recent years, Solomon Islands forests were dangerously overexploited. The government has said it would reform timber harvesting policies with the aim of carrying out logging on a more sustainable basis. Other important cash crops and exports include copra and palm oil. In 1998 Ross Mining of Australia began producing gold at Gold Ridge on Guadalcanal, and other areas have seen minerals exploration.

In the wake of the June 2000 ethnic violence, exports of palm oil and gold ceased and exports of timber fell. Solomon Islands had been particularly hard hit by the Asian economic crisis even before the ethnic violence of June 2000. The Asian Development Bank estimates that the crash of the market for tropical timber reduced Solomon Island's GDP by between 15%-25%. About one-half of all jobs in the timber industry were lost. An upward trend in log exports began in 2001 but ended in 2009 as international demand and particularly Asian market demand fell due to the effects of the global financial crisis. The recovery of its export partners' economies in 2010 saw an increase in Solomon Islands' log export volumes once again. However, this was seen by some as an unsustainable exploitation of forest resources, raising questions about the quality of the country's economic growth.

Due to financial insolvency and following the RAMSI intervention in 2003, the Solomon Islands Government had recast its budget and had taken a hard look at priorities. It consolidated and renegotiated its domestic debt and with Australian backing sought to renegotiate its foreign obligations. Much work remains to be done. Political instability has negatively impacted economic development.

Exploitation of Solomon Islands' rich fisheries offers the best prospect for further export and domestic economic expansion. A Japanese joint venture, Solomon Taiyo Ltd., which operated the only fish cannery in the country, closed in mid-2000 as a result of the ethnic disturbances. The plant has reopened under local management, and the export of tuna has resumed. In October 2009, Australian company Allied Gold took over operation of the Gold Ridge mine and in March 2010 announced a U.S. $150 million plan to reopen the mine, with mining operations beginning in the second quarter of 2011. Small-scale production by landowners in the Gold Ridge mining area resulted in the production and export of 130.4 kilograms of alluvial gold in 2009.

Tourism, particularly diving, is an important service industry for Solomon Islands. Growth in that industry is hampered, however, by political instability, security issues, lack of infrastructure, and transportation limitations.

Principal aid donors are Australia, New Zealand, the European Union, Japan, and the Republic of China.

FOREIGN RELATIONS
Countries with diplomatic missions in Solomon Islands are Australia, United Kingdom, New Zealand, Papua New Guinea, and Japan. Solomon Islands also has diplomatic relations with the Republic of China, which has a resident representative in Honiara. On May 5, 2010, Solomon Islands and Cyprus signed an agreement to establish formal diplomatic relations.

The U.S. Ambassador resident in Port Moresby, Papua New Guinea is accredited to Solomon Islands. Solomon Islands' Permanent Representative to the United Nations also is accredited as its ambassador to the United States and Canada.

Relations with Papua New Guinea, which had become strained because of an influx of refugees from the Bougainville rebellion and attacks on the northern islands of Solomon Islands by elements pursuing Bougainvillean rebels, have been repaired. A peace accord on Bougainville confirmed in 1998 has removed the armed threat, and the two nations regularized border operations in a 2004 agreement. On May 21, 2010 Solomon Islands officially opened its first permanent overseas chancery in Papua New Guinea.

Membership in International Organizations
Solomon Islands is a member of the United Nations, Commonwealth, Pacific Community, Pacific Islands Forum (PIF), Melanesian Spearhead Group (MSG), and International Monetary Fund. It also is party to the partnership agreement between the European Union and the African, Caribbean, and Pacific Group of States (Cotonou Agreement).

U.S.-SOLOMON ISLANDS RELATIONS
The United States and Solomon Islands established diplomatic relations following its independence on July 7, 1978. U.S. representation is handled by the United States Embassy at Port Moresby where the Ambassador is resident. In recognition of the close ties forged between the United States and the people of Solomon Islands during World War II, the U.S. Congress financed the construction of the Solomon Islands Parliament building. There are approximately 116 American citizens residing permanently in Solomon Islands.

The two nations belong to a variety of regional organizations, including the Pacific Community and the Pacific Regional Environmental Program. The United States and Solomon Islands also cooperate under the U.S.-Pacific Islands multilateral Tuna Fisheries Treaty, under which the U.S. grants $18 million per year to Pacific island parties and the latter provide access to U.S. fishing vessels.

The U.S. coast guard provides training to Solomon Islands border protection officers, and the U.S. military also provides appropriate military education and training courses to national security officials.

The U.S. Peace Corps suspended its program in June 2000 due to the ethnic violence and breakdown in governance. More than 70 volunteers, serving throughout the country in rural community development, education, environmental management, and youth programs, were evacuated.

U.S. trade with Solomon Islands is very limited. In 2001 U.S. exports to Solomon Islands were less than 5% of all exports, while Solomon Islands exports to the United States in that year were negligible.

The U.S. Agency for International Development (USAID) contributes to the Coral Triangle Initiative (CTI) focused on preserving coral reefs, fisheries, and food security. Solomon Islands is one of six CTI countries.

Following the April 2, 2007 earthquake and tsunami, the United States provided $250,000 in humanitarian assistance grants and deployed the USNS Stockham with helicopter support to the affected area. In February 2009, the United States provided $50,000 in humanitarian assistance following severe flooding on the islands of Guadalcanal and Malaita. The Pacific Partnership 2009 mission provided humanitarian assistance on Guadalcanal and Malaita. Three school engineering projects were completed and over 4,500 people received medical care.

Principal U.S. Embassy Officials
Ambassador--Teddy Taylor
Deputy Chief of Mission--Paul Berg
Consular Agent--Ms. Keithie Saunders (office phone 677 24123/23426 or mobile 677 94731)

American Embassy Port Moresby is located on Douglas Street, Port Moresby, Papua New Guinea, P.O. Box 1492, Port Moresby (tel: (675) 321-1455; fax: (675) 321-3423).

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Burkina Faso

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May 5, 2011Bureau of African Affairs

Background Note: Burkina Faso



Official Name: Burkina Faso



PROFILE

Geography
Area: 274,200 sq. km. (106,000 sq. mi.); about the size of Colorado.
Cities: Capital--Ouagadougou (pop. 1.5 million). Other cities--Bobo-Dioulasso (500,000), Koudougou (90,000).
Terrain: Savanna; brushy plains and scattered hills.
Climate: Sahelian; pronounced wet and dry seasons.

People
Nationality: Noun and adjective--Burkinabe (accent on last e).
Population (2010): 16.3 million.
Annual population growth rate (2010): 3.1%.
Ethnic groups: 63 ethnic groups among which are Mossi (almost half of the total population), followed by Gourmantche, Fulani, Dioula, and Bissa.
Religions: Muslim 60%, Catholic 19%, animist 15%, Protestant 5%.
Languages: French (official); More; Gourma; Fulfulde; Dioula; Tamasheq.
Education: Literacy (2009)--26%.
Health: Infant mortality rate (2010)--91.7/1,000. Life expectancy (2010)--56.7 years.
Work force: Agriculture--77.9%; industry--2.1%; commerce, services, and government--5.5%.

Government
Type: Republic.
Independence: August 5, 1960.
Constitution: June 11, 1991.
Branches: Executive--president (head of state and Council of Ministers) prime minister (head of government). Legislative--one chamber. Judiciary--independent.
Subdivisions: 13 regions, 45 provinces, 351 communes.
Political parties: Congress for Democracy and Progress (CDP), Alliance for Democracy Federation/ African Democratic Assembly (ADF/RDA), Unity for the Renaissance/Sankarist Party (UNIR/PS), Unity for the Republic (UPR), Convention of Democratic Forces of Burkina (CFD/B), and numerous other small opposition parties.
Suffrage: Direct universal.
Government budget (2010): $1.53 billion (15.7% of GDP).
Defense (2005): 1.2% of budget.

Economy (Economist Intelligence Unit data)
GDP (2010): $9.3 billion.
Annual growth rate (2010): 5.2%.
Per capita GDP (2009): $580.
Avg. inflation rate (2010): -0.8%.
Natural resources: Manganese, gold, limestone, marble, phosphate, zinc, uranium.
Agriculture (34% of 2009 GDP): Products--cotton, millet, sorghum, rice, livestock, peanuts, shea nuts, maize.
Industry (26.5% of GDP): Type--mining, agricultural processing plants, brewing and bottling, light industry.
Trade (2010): Exports--$1.034 billion. Main exports (2009)--gold ($380.8 million), cotton ($210.3 million); shea butter ($37.5 million); livestock; peanuts. Major markets--Singapore (9.3%); Belgium (7%); China (4.2%); Ghana (3.8%); India (2.8%). Imports--$1.544 billion. Main imports (2009)--capital goods ($396.2 million); petroleum products ($380.6 million); food ($143.8 million). Major markets--Cote d’Ivoire (22.3%); France (17.9%); Togo (5.9%); South Africa (3.2%); Belgium (3.1%).
Official exchange rate: Fixed to the euro. Communaute Financiere Africaine (CFA) francs 656=1 euro; 474 CFA=U.S. $1.

GEOGRAPHY
Burkina Faso is a landlocked country located in the middle of West Africa's "hump." It is geographically in the Sahel--the agricultural region between the Sahara Desert and the coastal rain forests. Most of central Burkina Faso lies on a savanna plateau, 200 meters-300 meters (650 ft.-1,000 ft.) above sea level, with fields, brush, and scattered trees. The largest river is the Mouhoun (Black Volta), which is partially navigable by small craft. Burkina Faso has West Africa's largest elephant population. Game preserves also are home to lions, hippos, monkeys, warthogs, and antelope. Infrastructure and tourism are, however, not well developed. Annual average rainfall varies from about 100 centimeters (40 in.) in the south to less than 25 centimeters (10 in.) in the north and northeast, where hot desert winds accentuate the dryness of the region. The cooler season, November to February, is pleasantly warm and dry (but dusty), with cool evenings. March-June can be very hot. In July-September, the rains bring a 3-month cooler and greener humid season.

PEOPLE
Burkina Faso's 16.3 million people belong to two major West African cultural groups--the Voltaic and the Mande (whose common language is Dioula). The Voltaic Mossi make up about one-half of the population. The Mossi claim descent from warriors who migrated to present-day Burkina Faso from Ghana and established an empire that lasted more than 800 years. Predominantly farmers, the Mossi kingdom is still led by the Mogho Naba, whose court is in Ouagadougou. With a continued high average fertility rate of 6.2 children per woman of reproductive age, total national population is projected to grow to 21.5 million in 2020. While the average annual national population growth rate is 3.1%, urban areas are growing by over 10% per year. Nearly 65% of population is less than 25 years old.

Burkina Faso is an ethnically integrated, secular state. The average population density is 51.4 people per square kilometer (128/sq. mi), but in the center of the country it is about 80 people per square kilometer. Millions of Burkinabe reside in other countries, especially Cote d'Ivoire and Ghana. A plurality (60.5%) of Burkinabe are Muslim, but most also adhere to traditional African religions. Christians, both Roman Catholics and Protestants, comprise about 24% of the population, with their largest concentration in urban areas.

Few Burkinabe have had formal education. Schooling is in theory free and compulsory until the age of 16, but only about 80.3% of Burkina's primary school-age children are enrolled in primary school. Of those enrolled, only about 41.7% complete primary school. The University of Ouagadougou, founded in 1974, was the country's first institution of higher education. The Polytechnical University in Bobo-Dioulasso was opened in 1995. The University of Koudougou was founded in 2005 to substitute for the former teachers' training school, Ecole Normale Superieure de Koudougou.

HISTORY
Until the end of the 19th century, the history of Burkina Faso was dominated by the empire-building Mossi. The French arrived and claimed the area in 1896, but Mossi resistance ended only with the capture of their capital Ouagadougou in 1901. The colony of Upper Volta was established in 1919, but it was dismembered and reconstituted several times until the present borders were recognized in 1947.

The French administered the area indirectly through Mossi authorities until independence was achieved on August 5, 1960. The first President, Maurice Yameogo, resigned in 1966 following continuous worker strikes and handed power over to Lt. Col. Sangoule Lamizana, who was head of a government of senior army officers. Lamizana remained in power throughout the 1970s, as President of military and then elected governments.

Following more worker strikes, Col. Saye Zerbo overthrew President Lamizana in 1980. Colonel Zerbo also encountered resistance from workers’ unions and was overthrown 2 years later by Maj. Dr. Jean-Baptiste Ouedraogo and the Council of Popular Salvation (CSP). Factional infighting developed between moderates in the CSP and radicals led by Capt. Thomas Sankara, who was appointed Prime Minister in January 1983, but was subsequently arrested. Efforts to bring about his release, directed by Capt. Blaise Compaore, resulted in yet another military coup d'etat, led by Sankara and Compaore on August 4, 1983.

Sankara and Compaore established the National Revolutionary Committee with Sankara as President, and he vowed to "mobilize the masses." But the committee's membership remained secret and was dominated by Marxist-Leninist military officers. In 1984, Upper Volta changed its name to Burkina Faso, meaning "the country of honorable people." But many of the strict security and austerity measures taken by Sankara provoked resistance. Despite his initial popularity and personal charisma, Sankara was killed in a coup which brought Capt. Blaise Compaore to power in October 1987.

Compaore pledged to pursue the goals of the revolution but to "rectify" Sankara's "deviations" from the original aims. In fact, Compaore reversed most of Sankara's policies and combined the leftist party he headed with more centrist parties after the 1989 arrest and execution of two military officers, Major Jean-Baptiste Boukary Lingini and Captain Henri Zongo, who had supported Compaore and governed with him up to that point.

GOVERNMENT AND POLITICAL CONDITIONS
With Compaore alone at the helm, a democratic constitution was approved by referendum in 1991. In December 1991, Compaore was elected President, running unopposed after the opposition boycotted the election. The opposition did participate in the following year's legislative elections, in which the ruling party won a majority of seats.

The government of the Fourth Republic includes a strong presidency, a prime minister, a Council of Ministers presided over by the president, a unicameral National Assembly, and the judiciary. The legislature and judiciary are nominally independent but remain susceptible to executive influence. Given the fragile roots of democratic institutions, constitutional checks and balances are seldom effective in practice. Compaore and the CDP dominate the cabinet and all areas of government.

Burkina held multiparty municipal elections in 1995, 2000, and 2006, as well as legislative elections in 1997, 2002, and 2007. Balloting was considered largely free and fair in all elections despite minor irregularities. However, the ruling party's dominance meant that the playing field was not entirely even. The Congress for Democracy and Progress (CDP), the governing party, won overwhelming majorities in all the elections, except for the 2002 legislative elections, where the CDP won with only a small majority of the 111 seats.

Compaore won the November 1998 presidential election for a second 7-year term against two minor-party candidates. But within weeks of Compaore's victory, domestic opposition and civil society groups took to the streets to protest the December 13, 1998, murder of leading independent journalist Norbert Zongo, whose investigations of the death of the President's brother's chauffeur suggested involvement of the Compaore family.

The Collective Against Impunity, including civil society groups, human rights associations, and opposition parties--led by human rights activist Halidou Ouedraogo and opposition political party leaders including the late Prof. Joseph Ki-Zerbo and (for a while) Hermann Yameogo, son of the first President--challenged Compaore and his government to bring Zongo's murderers to justice and make political reforms. The Zongo killings still resonate in Burkina politics, though not as strongly as in the past. There has been no significant progress on the investigation of the case. The case is not closed; it is suspended and can be re-activated until July 2016 if new information is brought before the courts. However, with the December 23, 2009 death of Chief Warrant Officer Marcel Kafando, sole suspect in the case, the case is de facto closed.

Compaore was re-elected to the presidency for a 5-year term in November 2005. Observers considered the election to have been generally free, despite minor irregularities, but not entirely fair due to the ruling party's control of official resources. The constitution had been amended in 2000 to limit the president to a 5-year term, renewable once, beginning with the November 2005 election. The amendment was controversial because it did not make any mention of retroactivity, meaning that President Compaore's eligibility to present himself for the 2005 presidential election, his third, was a matter of debate. The Constitutional Court ruled in October 2005 that the amendment was not retroactive, and Compaore went on to win the November 2005 presidential election with over 80% of the vote. Most international and national electoral observers believed that the election was fair.

In 2007, the CDP won a majority in the May legislative elections, which observers declared generally free and orderly despite irregularities including fraud involving voter identification cards. Observers agreed that the 2004 revision of the electoral code negatively impacted the 2002 gains of opposition political parties during the 2007 legislative elections.

Running against six opponents, President Compaore won the November 21, 2010 presidential elections with over 80% of the vote, with an estimated 55% voter turnout. Compaore’s current term is supposed to be his last, but there have been suggestions that he is preparing to change the constitution to remove limits on the number of terms a president can serve. Legislative elections will be held in May 2012.

Principal Government Officials
President--Blaise Compaore
Prime Minister--Beyon Luc Adolphe Tiao
Foreign Affairs and Regional Cooperation--Djibril Bassole
Ambassador to the United States--Paramanga Ernest Yonli

Burkina Faso maintains an embassy in the United States at 2340 Massachusetts Ave. NW, Washington, DC 20008 (tel. 202-332-5577).

Next Elections Scheduled
Legislative elections--May 2012
Presidential elections-- 2015

ECONOMY
Burkina Faso is one of the poorest countries in the world, with a per capita gross domestic product (GDP) of $580. About 80% of the population relies on subsistence agriculture, with only a small fraction directly involved in industry and services. Drought, poor soil, lack of adequate communications and other infrastructure, a low literacy rate, and an economy vulnerable to external shocks are all longstanding problems. The export economy also remains subject to fluctuations in world prices.

Burkina remains committed to the structural adjustment program it launched in 1991, and it has been one of the first beneficiaries of the World Bank/International Monetary Fund (IMF) debt-relief and poverty reduction programs for heavily indebted poor countries. Real gross domestic product (GDP) growth, which has historically remained steady, is projected to increase from 3.2% in 2009 to 5.2% in 2010 and to reach 4.7% in 2011. Burkina Faso is recognized as a good development performer and partner. From 2008 to 2009, annual assistance amounts have more than tripled to $1.3 billion, and annual per capita assistance was estimated in 2009 at $81.

Many Burkinabe migrate to neighboring countries for work, and the remittances provide a contribution to the economy's balance of payments that is third only to gold and cotton as a source of foreign exchange earnings. Political and economic problems in Cote d'Ivoire have had a direct impact on this source of revenue for millions of Burkina households. The 8-year-old crisis in neighboring Cote d'Ivoire negatively affected trade between the two countries. Goods and services, as well as remittances, continue to flow from Burkinabe living in Cote d'Ivoire, but they are sometimes rerouted through other countries in the region, such as Togo, Ghana, and Benin. Commercial and personal traffic across the border is slowly rebuilding steam. The current global financial crisis and resulting job losses have also negatively impacted remittances.

Burkina is attempting to improve the economy by developing its mineral resources, particularly gold, improving its infrastructure, making its agricultural and livestock sectors more productive and competitive, and stabilizing the supplies and prices of food grains. Staple crops are millet, sorghum, maize, and rice. The cash crops are cotton, peanuts, karite (shea nuts), and sesame. Livestock, once a major export, has declined. Burkina Faso has increased its gold exports substantially over the past 3 years, with 7.8 tons exported in 2009; it was projected that up 20 tons could be exported in 2010. Burkina Faso is Africa’s largest producer of cotton, which is a major export and in a good year accounts for over half of the value of all exports and employs 17% of the population. In 2010, almost 80% of the cotton planted in Burkina Faso was grown from genetically modified seeds.

Manufacturing is limited to cotton and food processing (mainly in Bobo-Dioulasso) and import substitution heavily protected by tariffs. Some factories are privately owned, and others are set to be privatized. Burkina Faso's newly-written investment code has helped to promote foreign investment. In the International Finance Corporation’s (IFC) Doing Business 2010 report, Burkina Faso ranked at 147 out of 183 countries, up from 155 in 2009 and 164 in 2008; this improvement reflects the country's successful efforts to create an environment conducive to business growth. Recent reforms include the adoption of a labor code in May 2008, improving the process to transfer property, the elimination of commune authorization requirements, the creation of a one-stop shop to facilitate construction permits, a decrease of the corporate tax rate from 35% to 30%, and a decrease on dividend taxes from 15% to 12%. Foreign investors, particularly in the mining sector, have taken note of this development; since 2007, four commercial gold mines and a manganese mine have been opened. Several others are slated to follow in the next few years. A railway connects Burkina with the port of Abidjan, Cote d'Ivoire, 1,150 kilometers (712 mi.) away. Primary roads between main towns in Burkina Faso are paved. Domestic air service and flights within Africa are limited. Phones and Internet service providers are relatively reliable, but the cost of utilities is very high.

FOREIGN RELATIONS
Burkina Faso has excellent relations with European aid donors. France and the European Union, in particular, provide significant aid. Other donors with large bilateral aid programs include Germany, Denmark, the Netherlands, Sweden, Switzerland, and Canada. Burkina Faso maintains relation with Libya, but they are tense. Burkina Faso recognizes Taiwan. President Compaore is active in sub-regional diplomacy in West Africa. He was elected in January 2007 to be Chairman of the Economic Community of West African States (ECOWAS) and has acted as a mediator in the political crises in neighboring Togo and Cote d'Ivoire and, more recently, Guinea. From January 2008 to December 2009, Burkina Faso was a non-permanent member of the UN Security Council. Burkina also plays a role regional in peacekeeping operations, having sent two battalions and one company to Darfur under a UNAMID/African Union mandate.

U.S.-BURKINA RELATIONS
U.S. relations with Burkina Faso are excellent. In addition to regional peace and stability, U.S. interests in Burkina are to promote continued democratization and greater respect for human rights and to encourage sustainable economic development. In 2005, Burkina Faso and the Millennium Challenge Corporation (MCC) signed a $12 million Threshold Country Program to build schools and increase girls' enrollment rates. In July 2008, Burkina Faso signed a 5-year compact for $480.9 million with MCC. The compact program will combat poverty by building roads, improving rural land governance, aiding farmers with agricultural development and irrigation projects, and a second phase of the above-mentioned girls’ primary education program. The signing of this MCC Compact Program made the U.S. Burkina Faso’s largest bilateral donor. Although the U.S. Agency for International Development (USAID) closed its office in Ouagadougou in 1995, it re-established a presence in 2009 and increased assistance from about $15 million annually in 2005 to about $55 million in 2010.

The Peace Corps entered Burkina Faso in 1967. The Peace Corps program was phased out in 1987, but was invited to return to Burkina Faso in 1995 as part of a newly established health project. One year later, the Peace Corps established a secondary education project, and in 2003, Peace Corps introduced a small-enterprise development project to complement the government's poverty reduction and private sector promotional programs. In 2005, the Government of Burkina Faso asked for assistance to increase the level of girls' access to education, which later became the focus of the MCC’s Threshold Compact with Burkina Faso. All Peace Corps Volunteers, regardless of sector, are trained in how to promote awareness on HIV/AIDS and gender and youth development. Currently there are 150 Peace Corps Volunteers serving in Burkina Faso. Seventy-three of these volunteers are second- and third-year volunteers, and 77 have just begun their Peace Corps service. Burkina Faso is a significant country in the Peace Corps' overall growth plan to have 12,000 volunteers worldwide by 2012. Starting in June 2011, the Peace Corps will establish a new sector in Burkina Faso, Agriculture and the Environment, to continue to combat poverty and stay the effects of climate change.

U.S. trade with Burkina Faso in 2009 totaled $28 million: $25.8 million in U.S. exports (a 5% increase over 2008 data) and $2.1 million in Burkinabe exports (a 262% increase over 2008). Top U.S. exports included agricultural products ($9 million), machinery ($7 million), donations and low value shipments ($2 million), rubber ($2 million), and vehicles ($2 million). Top U.S. imports were agricultural products ($280,000), vehicles ($218,000) and precious stones ($202,000). Investment possibilities exist, especially in Burkina’s mining and communications sectors.

Military ties between the U.S. and Burkina are strengthening. Burkina Faso is a partner in the Africa Contingency Operations Training and Assistance (ACOTA) program. The United States has already trained three 750-man battalions for peace support operations in Darfur. Using a small Department of Defense International Military Education and Training (IMET) budget, the Embassy has established an English-language laboratory at a local military base, and has maximized attendance at the officer basic courses in the U.S. Representatives from the Ministries of Defense, Security, Foreign Affairs, and Justice and civil society have attended Africa Center for Strategic Studies (ACSS) seminars in the U.S. and regionally. The Government of Burkina Faso has eagerly accepted additional training, especially in counterterrorism and humanitarian assistance, and is contributing to the support of U.S. efforts in the Sahel. Burkina has recently become a member of the Trans-Sahara Counterterrorism Partnership (TSCTP) and USAID plans to start TSCTP activities over the coming year. In May 2010, Burkina Faso hosted Flintlock, a multilateral military exercise.

Principal U.S. Officials
Ambassador--Thomas Dougherty
Deputy Chief of Mission--Deborah Klepp
Peace Corps Country Director--Shannon Meehan
MCC Resident Country Director--Kateri Clement
USAID Country Program Manager--Glenn Anders
Consular Officer--Noah Geesaman
Public Affairs Officer--Meg Riggs
Political/Military Officer--Melanie Zimmerman
Economic Officer--Sarah Gourde
Management Officer--Kevin Doyle

The U.S. Embassy in Burkina Faso is located at Avenue Sembene Ousmane, Rue 15, 873 - Ouaga 2000. Mailing addresses are: International mail: Ambassade des Etats-Unis, 01 B.P. 35, Ouagadougou 01, Burkina Faso; Mail from the U.S.: Department of State, 2440 Ouagadougou Place, Washington, DC 20521-2440. Tel: (226) 50-49-5300; fax: (226) 50-49-56-23 or (226) 50-49-53-36. Email address: amembouaga@state.gov.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Spain

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May 3, 2011Bureau of European and Eurasian Affairs

Background Note: Spain



Official Name: Kingdom of Spain



PROFILE

Geography

Area: 504,750 sq. km. (194,884 sq. mi.), including the Balearic and Canary Islands; about the size of Arizona and Utah combined.
Cities (2010 census): Capital--Madrid (3.3 million). Other cities--Barcelona (1.6 million), Valencia (809,267), Seville (704,198), Malaga (568,507), Zaragoza 675,121), Bilbao (353,187).
Terrain: High plateaus, lowland areas such as narrow coastal plains, and mountainous regions.
Climate: Temperate. Summers are hot in the interior and more moderate and cloudy along the coast; winters are cold in interior and partly cloudy and cool along the coast.
Time zone: Spanish mainland and Balearic Isles--local time is 1 hour ahead of Greenwich Mean Time (GMT) in winter and 2 hours ahead in summer. Canary Islands are on GMT.

People
Nationality: Noun--Spaniard(s). Adjective--Spanish.
Population (National Institute of Statistics (INE), January 1, 2011): 47,150,819.
Ethnic groups: Distinct ethnic groups within Spain include the Basques, Catalans, and Galicians.
Religion: Predominantly Roman Catholic (approx. 75%); Protestant and Islamic faiths also have a significant presence.
Languages: Spanish (official) 74%, Catalan-Valencian 17%, Galician 7%, Basque 2%.
Education: Years compulsory--to age 16. Literacy (INE, third quarter 2008)--97.6%.
Work force (first quarter 2011): 18.2 million.
Unemployment rate (first quarter 2011): 21.29%.

Government
Type: Constitutional monarchy (Juan Carlos I proclaimed King November 22, 1975).
Constitution: 1978.
Branches: Executive--president of government nominated by monarch, subject to approval by democratically elected Congress of Deputies. Legislative--bicameral Cortes: a 350-seat Congress of Deputies (elected by the d'Hondt system of proportional representation) and a Senate. Four senators are elected in each of 47 peninsular provinces, 16 are elected from the three island provinces, and Ceuta and Melilla elect two each; this accounts for 208 senators. The parliaments of the 17 autonomous regions also elect one senator as well as one additional senator for every 1 million inhabitants within their territory (about 20 senators). Judicial--Constitutional Tribunal has jurisdiction over constitutional issues. Supreme Tribunal heads system comprising territorial, provincial, regional, and municipal courts.
Subdivisions: 47 peninsular and three island provinces; two enclaves on the Mediterranean coast of Morocco (Ceuta and Melilla) and three island groups along that coast--Alhucemas, Penon de Velez de la Gomera, and the Chafarinas Islands.
Political parties: Spanish Socialist Workers Party (PSOE), Popular Party (PP), and the United Left (IU) coalition. Key regional parties are the Convergence and Union (CIU) in Catalonia and the Basque Nationalist Party (PNV) in the Basque country.

Economy
GDP (2010): $1.409 trillion (€1.063 trillion); seventh-largest economy in the Organization for Economic Cooperation and Development (OECD).
Per capita GDP (2010): $29,876 (€22,536).
GDP annual growth rate (2010): -0.1%.
Natural resources: Coal, lignite, iron ore, uranium, mercury, pyrites, fluorspar, gypsum, zinc, lead, tungsten, copper, kaolin, hydroelectric power.
Agriculture and fisheries (2.5% of GDP, 2010): Products--grains, vegetables, citrus and deciduous fruits, wine, olives and olive oil, sunflowers, livestock and poultry, dairy products, seafood.
Industry (11.5% of GDP, 2010): Types--processed foods, textiles, footwear, petrochemicals, steel, automobiles, consumer goods, electronics.
Services (2010): 65.57% of GDP.
Trade (2010): Exports--$247.7 billion (€185.8 billion): automobiles, fruits, minerals, metals, clothing, footwear, textiles. Major markets--EU 67.7%, U.S. 3.51%. Imports--$317.4 billion (€238.1 billion): petroleum, oilseeds, aircraft, grains, chemicals, machinery, transportation equipment, fish, consumer goods. Major sources--EU 54.6%, U.S. 4%.
Average exchange rate (2010): 1 euro=U.S. $1.326.

PEOPLE
Spain's population density, lower than that of most European countries, is roughly equivalent to New England's. In recent years, following a longstanding pattern in the rest of Europe, rural populations are moving to cities. Urban areas are also experiencing a significant increase in immigrant populations, chiefly from North Africa, South America, and Eastern Europe.

Spain has no official religion. The constitution of 1978 disestablished the Roman Catholic Church as the official state religion, while recognizing the role it plays in Spanish society. According to the National Institute of Statistics (April 2010), 73.2% of the population are Catholic, 2.3% belong to another religion, 14.6% are agnostic, and 7.6% are atheists.

Educational System
About 70% of Spain's student population attends public schools or universities. The remainder attends private schools or universities, the great majority of which are operated by the Catholic Church. Compulsory education begins with primary school or general basic education for ages 6-14. It is free in public schools and in many private schools, most of which receive government subsidies. Following graduation, students attend either a secondary school offering a general high school diploma or a school of professional education (corresponding to grades 9-12 in the United States) offering a vocational training program. The Spanish university system offers degree and post-graduate programs in all fields--law, sciences, humanities, and medicine--and the superior technical schools offer programs in engineering and architecture.

HISTORY
The Iberian Peninsula has been settled for millennia. Some of Europe's most impressive Paleolithic cultural sites are located in Spain, including the famous caves at Altamira that contain spectacular paintings dating from about 15,000 to 25,000 years ago. Beginning in the ninth century BC, Phoenicians, Greeks, Carthaginians, and Celts entered the Iberian Peninsula. The Romans followed in the second century BC and laid the groundwork for Spain's present language, religion, and laws. Although the Visigoths arrived in the fifth century AD, the last Roman strongholds along the southern coast did not fall until the seventh century AD. In 711, North African Moors sailed across the straits, swept into Andalusia, and within a few years, pushed the Visigoths up the peninsula to the Cantabrian Mountains. The Reconquest--efforts to drive out the Moors--lasted until 1492. By 1512, the unification of present-day Spain was complete.

During the 16th century, Spain became the most powerful nation in Europe, due to the immense wealth derived from its presence in the Americas. But a series of long, costly wars and revolts, capped by the English defeat of the "Invincible Armada" in 1588, began a steady decline of Spanish power in Europe. Controversy over succession to the throne consumed the country during the 18th century, leading to an occupation by France during the Napoleonic era in the early 1800s and a series of armed conflicts throughout much of the 19th century.

The 19th century saw the revolt and independence of most of Spain's colonies in the Western Hemisphere; three wars over the succession issue; the brief ousting of the monarchy and establishment of the First Republic (1873-74); and, finally, the Spanish-American War (1898), in which Spain lost Cuba, Puerto Rico, and the Philippines to the United States. A period of dictatorial rule (1923-31) ended with the establishment of the Second Republic. It was dominated by increasing political polarization, culminating in the leftist Popular Front electoral victory in 1936. Pressures from all sides, coupled with growing and unchecked violence, led to the outbreak of the Spanish Civil War in July 1936.

Following the victory of his nationalist forces in 1939, General Francisco Franco ruled a nation exhausted politically and economically. Spain was officially neutral during World War II but followed a pro-Axis policy. Therefore, the victorious Allies isolated Spain at the beginning of the postwar period. The country signed the Mutual Defense Assistance Agreement with the U.S. on September 26, 1953 and joined the United Nations in 1955. In 1959, under an International Monetary Fund (IMF) stabilization plan, the country began liberalizing trade and capital flows, particularly foreign direct investment.

Despite the success of economic liberalization, Spain remained for years the most closed economy in Western Europe--judged by the small measure of foreign trade to economic activity--and the pace of reform slackened during the 1960s as the state remained committed to "guiding" the economy. Nevertheless, in the 1960s and 1970s, Spain was transformed into a modern industrial economy with a thriving tourism sector. Its economic expansion led to improved income distribution and helped develop a large middle class. Social changes brought about by economic prosperity and the inflow of new ideas helped set the stage for Spain's transition to democracy during the latter half of the 1970s.

Upon the death of General Franco in November 1975, Franco's personally-designated heir Prince Juan Carlos de Borbon y Borbon assumed the titles of king and chief of state. Dissatisfied with the slow pace of post-Franco liberalization, he replaced Franco's last Prime Minister with Adolfo Suarez in July 1976. Suarez entered office promising that elections would be held within 1 year, and his government moved to enact a series of laws to liberalize the new regime. Spain's first elections since 1936 to the Cortes (Parliament) were held on June 15, 1977. Prime Minister Suarez's Union of the Democratic Center (UCD), a moderate center-right coalition, won 34% of the vote and the largest bloc of seats in the Cortes.

Under Suarez, the new Cortes set about drafting a democratic constitution that was overwhelmingly approved by voters in a national referendum in December 1978.

GOVERNMENT AND POLITICAL CONDITIONS
Parliamentary democracy was restored following the 1975 death of General Franco, who had ruled since the end of the civil war in 1939. The 1978 constitution established Spain as a parliamentary monarchy, with the prime minister responsible to the bicameral Cortes (Congress of Deputies and Senate) elected every 4 years. On February 23, 1981, rebel elements among the security forces seized the Cortes and tried to impose a military-backed government. However, the great majority of the military forces remained loyal to King Juan Carlos, who used his personal authority to put down the bloodless coup attempt.

In October 1982, the Spanish Socialist Workers Party (PSOE), led by Felipe Gonzalez, swept both the Congress of Deputies and Senate, winning an absolute majority. Gonzalez and the PSOE ruled for the next 13 years. During that period, Spain joined the North Atlantic Treaty Organization (NATO) and the European Community.

In March 1996, Jose Maria Aznar's Popular Party (PP) won a plurality of votes. Aznar moved to decentralize powers to the regions and liberalize the economy, with a program of privatization, labor market reform, and measures designed to increase competition in selected markets. During Aznar's first term, Spain fully integrated into European institutions, qualifying for the European Monetary Union, and participated, along with the United States and other NATO allies, in military operations in the former Yugoslavia. President Aznar and the PP won reelection in March 2000, obtaining absolute majorities in both houses of parliament.

After the terrorist attacks on the U.S. on September 11, 2001, President Aznar became a key ally in the fight against terrorism. Spain backed the military action against the Taliban in Afghanistan and took a leadership role within the European Union (EU) in pushing for increased international cooperation on terrorism. The Aznar government, with a rotating seat on the UN Security Council, supported the intervention in Iraq.

Spanish parliamentary elections on March 14, 2004 came only 3 days after a devastating terrorist attack on Madrid commuter rail lines that killed 191 and wounded over 1,400. With large voter turnout, PSOE won the election and its leader, Jose Luis Rodriguez Zapatero, took office on April 17, 2004. Carrying out campaign promises, the Zapatero government immediately withdrew Spanish forces from Iraq but has continued to support Iraq reconstruction efforts. The Zapatero government has supported coalition efforts in Afghanistan, including maintaining troop support for 2004 and 2005 elections, supported reconstruction efforts in Haiti, sent troops to UNIFIL in Lebanon, and cooperated on counterterrorism issues and many other issues of importance to the U.S. Zapatero was re-elected for a second term as President on March 9, 2008. Zapatero announced in April 2011 that he will not run for re-election in 2012.

Local Government
The 1978 constitution authorized the creation of regional autonomous governments. By 1985, 17 regions covering all of peninsular Spain, the Canaries, and the Balearic Islands had negotiated autonomy statutes with the central government. In 1979, the first autonomous elections were held in the Basque and Catalan regions, which have the strongest regional traditions by virtue of their history and separate languages. Since then, autonomous governments have been created in the remainder of the 17 regions. The central government continues to devolve powers to the regional governments, which will eventually have full responsibility for health care and education, as well as other social programs.

Terrorism
The Government of Spain is involved in a long-running campaign against Basque Fatherland and Liberty (ETA), a terrorist organization founded in 1959 and dedicated to promoting Basque independence. ETA targets Spanish security forces, military personnel, Spanish Government officials, politicians of the Popular Party and the Socialist Party (PSOE), and business people and civilian institutions that do not support ETA. The group has carried out numerous bombings against Spanish Government facilities and economic targets, including a car bomb assassination attempt on then-opposition leader Aznar in 1995 in which his armored car was destroyed but he was unhurt. The Spanish Government attributes over 800 deaths to ETA terrorism since its campaign of violence began. In recent years, the government has had more success in controlling ETA, due in part to increased security cooperation with French authorities.

In November 1999, ETA ended a cease-fire it declared in September 1998. Following the end of that cease-fire, ETA conducted a campaign of violence and has been blamed for the deaths of some 50 Spanish citizens and officials. Each attack has been followed by massive anti-ETA demonstrations around the country, clearly demonstrating that the majority of Spaniards, including the majority of Spain's Basque populace, have no tolerance for continued ETA violence. In March 2006, ETA declared another cease-fire, which it ended in June 2007 as a number of bombings and assassinations continued. In December 2007, two undercover Spanish police officers were killed in Capbreton, in France's southwestern region, by suspected ETA gunmen. Days before Spain's general elections in March 2008, former councilman Isaias Carrasco was murdered outside of his home by an ETA gunman. It was seen by many as a political move by ETA to try and influence the elections. Ignacio Uria Mendizabal, head of the Altuna y Uria company, was assassinated on December 3, 2008. The company was involved in the construction of a high-speed rail network in the region, a project opposed by ETA.

The government pursues a vigorous counterterrorist policy and has worked closely with its international allies to foil several suspected ETA attacks. In May 2008, Francisco Javier Lopez Pena, the political-military head of ETA, was arrested in Bordeaux. In November 2008, French authorities arrested reputed ETA military chief Miguel De Garikoitz Aspiazu Rubina, alias "Txeroki", closely followed by the arrest of his successor on December 8, 2008. These arrests struck a severe blow to the leadership of ETA. France and Spain have stepped up cooperation to crack down on ETA since a special accord was signed in January 2008 allowing Spanish agents to operate in southwestern France.

Radical Islamic terrorists are known to operate cells in Spain. On March 11, 2004, only 3 days before national elections, 10 bombs were detonated on crowded commuter trains during rush hour. Three were deactivated by security forces and one was found unexploded. Evidence quickly surfaced that jihadist terrorists were responsible for the attack that killed 191 people. Spanish investigative services and the judicial system have aggressively sought to arrest and prosecute suspected Al Qaeda-linked members and actively cooperate with foreign governments to diminish the transnational terrorist threat. A Spanish court convicted 18 individuals in September 2005 for their role in supporting Al Qaeda, and Spanish police disrupted numerous Islamist extremist cells operating in the country. The trial against 29 people for their alleged participation in the Madrid March 11, 2004 terrorist attack started in February 2007. One of the 29 was absolved during the trial. The prosecutor asked for sentences as high as 30,000 years of jail for some of them. In October 2007 three of the suspects were convicted of murder for their roles in the 2004 attack and received over 42,000 years in prison. Overall, 21 of 28 defendants were found guilty of some offense for their role in the bombings. In July 2008 the Spanish Supreme Court announced the acquittal on appeal of four of the 21 convicted defendants. The Supreme Court also upheld the lower court's acquittal of the suspected mastermind of the attacks, agreeing with the lower court's decision that because he had already been sentenced in Italy for belonging to a terrorist organization he could not be tried for the same crime twice. In a separate case, the Supreme Court overturned 14 of the 20 convictions, and reduced four other sentences, of a cell sentenced in February 2008 for plotting to truck-bomb the National Court.

In January 2008, Spanish authorities in Barcelona arrested 14 people believed to be connected to a Pakistani terrorist cell allegedly sympathetic to Al Qaeda. The group, potentially linked to Islamic terrorist activities, was believed to be on the verge of a terrorist bombing campaign against Barcelona's transportation network and possibly other targets in Europe. An informant working for the French intelligence services notified Spanish authorities of the pending attack.

In 2009, ETA marked its 50th anniversary with a series of high-profile and deadly bombings. On July 29, ETA detonated an explosive-laden, stolen van outside a Civil Guard barracks in Burgos. The blast injured more than 60 Civil Guards, spouses, and children. The following day, ETA murdered two Civil Guards in Mallorca with a car bomb. ETA had claimed its first victim of the year weeks earlier when it used a car bomb on June 19 to assassinate a national police officer in the Basque Region.

Also in 2009, the Basque regional government underwent a change of administration. The Socialist Party, under Patxi Lopez's regional leadership, assumed power as the first non-Basque nationalist government to administer the Basque country since the restoration of democracy in Spain 3 decades earlier. Lopez's administration implemented a more unequivocal counterterrorism policy to confront ETA. Meanwhile, Spain was pleased to see that the European Court of Human Rights in June upheld Spain's 2003 ban on the political party Batasuna for its ties to ETA.

Principal Government Officials
Chief of State, Commander in Chief of the Armed Forces--King Juan Carlos I
President of the Government (Prime Minister)--Jose Luis Rodriguez Zapatero
Minister of Foreign Affairs--Trinidad Jimenez
Ambassador to the United States--D. Jorge Dezcallar

Spain maintains an embassy in the United States at 2375 Pennsylvania Avenue NW, Washington, DC 20037 (tel. 202-452-0100) and nine consulates in U.S. cities.

ECONOMY
Spain's accession to the European Community--now European Union (EU)--in January 1986 required the country to open its economy to trade and investment, modernize its industrial base, improve infrastructure, and revise economic legislation to conform to EU guidelines.

These measures helped the economy grow rapidly over the next 2 decades. Unemployment fell from 23% in 1986 to a low point of 8% in mid-2007. The adoption of the euro in 2002 greatly reduced interest rates, spurring a housing boom that further fueled growth. The strong euro also encouraged Spanish firms to invest in the United States, where several Spanish firms have significant investments in banking, insurance, wind and solar power, biofuels, road construction, food, and other sectors. The end of the housing boom in 2007 and the international financial crisis led to a recession that began in the second quarter of 2008. Housing sales and construction declined dramatically, and the unemployment rate was more than 20% in the first quarter of 2010, the second-highest in the European Union after Latvia.

The Spanish economy grew by 0.1% in the first quarter of 2010, the first positive growth in 2 years. This was mostly attributed to an increase in public demand, while private demand dropped. GDP growth for all of 2010 was -0.1%. The budget deficit has been growing rapidly since the Zapatero government introduced high spending on public works and unemployment benefits to combat the recession, though the debt-to-GDP ratio is low due to a surplus maintained several years before 2008. The EU, IMF, and U.S. were among those that urged Spain to take the steps necessary to restore confidence in the Spanish economy. In May 2010, the Zapatero government introduced austerity reforms aimed at reducing the fiscal deficit to sustainable levels that reduced government employees' salaries, froze pension funds, and suspended public works. This legislation is designed to reduce the deficit to 7% of GDP in 2011, and Spain has pledged to reduce it to below 3% by 2013. In mid-June 2010, the government issued a decree implementing labor market reform to reduce rigidity in hiring and firing workers. Due largely to outstanding bad loans to the construction sector, Spanish regional saving banks (cajas) have been undergoing a series of mergers to increase liquidity and put the sector on a sound footing.

FOREIGN RELATIONS
After the return of democracy following the death of General Franco in 1975, Spain's foreign policy priorities were to break out of the diplomatic isolation of the Franco years and expand diplomatic relations, enter the European Community, and define security relations with the West. Spain assumed the EU presidency in January 2010 and finished its term in June 2010. As a member of NATO since 1982, Spain has established itself as a major participant in multilateral international security activities. Spain's EU membership represents an important part of its foreign policy. Even on many international issues beyond Western Europe, Spain prefers to coordinate its efforts with its EU partners through the European political cooperation mechanism.

With the normalization of diplomatic relations with Israel and Albania in 1986, Spain virtually completed the process of universalizing its diplomatic relations. It does not have diplomatic relations with North Korea.

Spain has maintained its special identification with Latin America. Its policy emphasizes the concept of Hispanidad, a mixture of linguistic, religious, ethnic, cultural, and historical ties binding Spanish-speaking America to Spain. Spain has been an effective example of transition from authoritarianism to democracy, as shown in the many trips that Spain's King and Prime Ministers have made to the region. Spain maintains economic and technical cooperation programs and cultural exchanges with Latin America, both bilaterally and within the EU.

Spain also continues to focus attention on North Africa, especially on Morocco, a source of much of Spain's large influx of legal and illegal immigrants over the past 10 years. This concern is dictated by geographic proximity and long historical contacts and more recently by immigration trends, as well as by the two Spanish enclave cities of Ceuta and Melilla on the northern coast of Africa. While Spain's departure from its former colony of Western Sahara ended direct Spanish participation in Morocco, it maintains an interest in the peaceful resolution of the conflict brought about there by decolonization. These issues were highlighted by a crisis in 2002, when Spanish forces evicted a small contingent of Moroccans from a tiny islet off Morocco's coast following that nation's attempt to assert sovereignty over the island.

Meanwhile, Spain has gradually begun to broaden its contacts with Sub-Saharan Africa. It has a particular interest in its former colony of Equatorial Guinea, where it maintains a large aid program.

In relations with the Arab world, Spain has sought to promote European-Mediterranean dialogue. Spain strongly supports the EU's Union for the Mediterranean (formerly called the Barcelona Process) to expand dialogue and trade between Europe and the nations of North Africa and the Middle East, including Israel. Barcelona will serve as the headquarters of the new Union for the Mediterranean proposed by French President Nicolas Sarkozy in 2007.

Spain has been successful in managing its relations with its three European neighbors, France, Andorra, and Portugal. The accession of Spain and Portugal to the EU has helped ease some of their periodic trade frictions by putting these into an EU context. Franco-Spanish bilateral cooperation is enhanced by joint action against Basque ETA terrorism. Ties with the United Kingdom are generally good, although the question of Gibraltar remains a sensitive issue.

U.S.-SPANISH RELATIONS
Spain and the United States have a long history of official relations and are closely associated in many fields. In addition to U.S. and Spanish cooperation in NATO, defense and security relations between the two countries are regulated by the Mutual Defense Assistance Agreement signed on September 26, 1953 and the 1989 Agreement on Defense Cooperation, revised in 2003. Under this agreement, Spain authorized the United States to use certain facilities at Spanish military installations.

The two countries also cooperate in several other important areas. The U.S. National Aeronautics and Space Administration (NASA) and the Spanish National Institute for Aerospace Technology (INTA) jointly operate the Madrid Deep Space Communications Complex in support of Earth orbital and solar system exploration missions. The Madrid Complex is one of the three largest tracking and data acquisition complexes comprising NASA's Deep Space Network.

An agreement on cultural and educational cooperation was signed on June 7, 1989. A new element, support by both the public and private sectors, gave a different dimension to the programs carried out by the joint committee for cultural and educational cooperation. These joint committee activities complement the binational Fulbright program for graduate students, postdoctoral researchers, and visiting professors, which is among the largest in the world and celebrated its 50th anniversary in 2008. Besides assisting in these exchange endeavors, the U.S. Embassy also conducts a program of educational, professional, and cultural exchanges, as well as hosting high-level official visits between officials from Spain and the United States.

Spain and the U.S. are strong allies in the fight against terrorism.

Principal U.S. Embassy Officials
Ambassador--Alan Solomont
Deputy Chief of Mission--Arnold Chacon
Counselor for Management Affairs--Kim Deblauw
Counselor for Agricultural Affairs--Robert Hanson
Counselor for Commercial Affairs--Ellen Lenny-Pessagno
Counselor for Consular Affairs--Christine Fagan, Acting
Counselor for Economic Affairs--Stephen Liston
Counselor for Political Affairs--Elaine Samson
Counselor for Public Affairs--Thomas Genton
Chief, Office of Defense Cooperation--Captain S. Jeff Tappan, USN
Defense Attache--Captain L. Scott Gage, USN
Drug Enforcement Administration Attache--Richard Bendekovic
NASA Representative--Anthony Carro
Regional Security Officer--Lisa Grice
Consul General Barcelona--Greggory Crouch
DHS, Customs and Border Protection, Container Security Initiative--Cecilio Gonzalez
DHS, Transportation Security Administration--Tere Franceschi
DHS, U.S. Immigration and Customs Enforcement--Alex Alonso
DHS, U.S. Secret Service--William Cachinero
Legal Attache--Peter Moore

The U.S. Embassy is located at Serrano, 75, 28006 Madrid (tel. 34-91-587-2200; fax 34-91-587-2303). Consulate General, Barcelona, Paseo Reina Elisenda 23, Barcelona 08034 (tel. 34-93-280-2227; fax 34-93-205-5206). The Embassy website is http://madrid.usembassy.gov.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Vanuatu

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May 5, 2011Bureau of East Asian and Pacific Affairs

Background Note: Vanuatu



Official Name: Republic of Vanuatu



PROFILE

Geography
Area: Land--12,190 sq. km. (4,707 sq. miles) archipelago of 83 islands. Comparative area--about the size of Connecticut.
Cities: Capital--Port Vila (on the island of Efate), pop. 44,040. Other towns--Luganville (on the island of Espiritu Santo, also known as Santo).
Terrain: Mostly mountains of volcanic origin, narrow coastal plains.
Climate: Tropical or subtropical.

People
Nationality: Noun and adjective--ni-Vanuatu.
Population (2009 census): 234,023.
Annual population growth rate (2009 census): 2.3%.
Ethnic groups: 94% ni-Vanuatu; 4% European; 2% other Pacific Islanders, Asian.
Religion: Predominantly Christian (82%).
Languages: Bislama (pidgin), English (official), French (official), over 100 tribal languages.
Education: Enrollment in primary is 100% with rapid fall-off to 20% in secondary and upper secondary. Adult literacy rate (2009)--84.8% of those age 15 and older.
Health: Infant mortality rate (2009)--14/1,000. Life expectancy (2009)--70 yrs.
Work force (1999): 134,000. Agriculture--65%. Industry--5%. Service--30%.

Government
Type: Parliamentary democracy.
Independence (from France and U.K.): July 30, 1980.
Constitution: July 30, 1980.
Branches: Executive--president (head of state), prime minister (head of government). Legislative--unicameral (52-member Parliament). Judicial--Supreme Court.
Administrative subdivisions: 6 administrative districts.
Major political parties: Melanesian Progressive Party (MPP); Union of Moderate Parties (UMP); National United Party (NUP); Vanua'aku Party (VP); Vanuatu Republican Party (VRP); the Confederation of Greens (CG); John Frum group; People's Progressive Party (PPP); National Community Association (NCA).
Suffrage: Universal over 18.
Independence Day: July 30.

Economy
GDP (2009): $647 million.
Per capita income (2009): $2,620.
Real growth rate (2010): 3.0%.
Avg. inflation rate (2010): 3.4%.
Natural resources: Forests, agricultural land, marine resources.
Agriculture: Products--copra, cocoa, coffee, cattle, timber.
Industry: Types--copra production, beef processing, sawmilling, tourism, financial services.
Trade (2009): Exports--$191.0 million: coconut oil, copra, kava, beef. Major markets--Thailand 52.9%, EU 12.3%, Japan 12.1%, Philippines 3.3%, India 2.4%, New Caledonia 1.5%, French Polynesia 1.4%. Imports--$465.8 million: machines and transport equipment, food and live animals, basic manufactures, mineral fuels. Major suppliers--Japan 17.3%, Australia 13.5%, China 12.3%, EU 12.5%, Singapore 12.0%, New Zealand 6.4%, Fiji 5.6%.
Average exchange rate (2009): U.S. $1 = 106.74 vatu.

GEOGRAPHY
Vanuatu is a 'Y' shaped archipelago of 83 islands. It is located about 1,750 kilometers east of Australia. Fiji lies to the east, New Caledonia to the south, and the Solomon Islands to the northwest, all within the area of the South Pacific called Melanesia.

The two largest islands, Espiritu Santo (or Santo) and Malakula, account for nearly one-half of the total land area. They are volcanic, with sharp mountain peaks, plateaus, and lowlands. The larger islands of the remaining half also are volcanic but are overlaid with limestone formations; the smaller ones are coral and limestone. Volcanic activity is common with an ever-present danger of a major eruption, the last of which occurred in 1945. Rainfall averages about 2,360 millimeters (94 in.) per year but can be as high as 4,000 millimeters (160 in.) in the northern islands.

PEOPLE
The population of Vanuatu is 94% indigenous Melanesian. About 44,040 live in the capital, Port Vila. Another 13,167 live in Luganville (or Santo Town) on Espiritu Santo. The remainder live in rural areas. Approximately 2,000 ni-Vanuatu live and work in New Caledonia. Although local pidgin, called Bislama, is the national language, English and French also are official languages. Indigenous Melanesians speak 105 local languages.

Christianity has had a profound influence on ni-Vanuatu society, and an estimated 82% of the population is affiliated with one of the Christian denominations. The largest denominations are Presbyterian, Roman Catholic, and Anglican. John Frum, a syncretic sect, also is important on Tanna Island.

HISTORY
The prehistory of Vanuatu is obscure; archaeological evidence supports the commonly held theory that peoples speaking Austronesian languages first came to the islands some 4,000 years ago. Pottery fragments have been found dating back to 1300-1100 B.C.

The first island in the Vanuatu group discovered by Europeans was Espiritu Santo, when in 1606 the Portuguese explorer, Pedro Fernandez De Quiros, spied what he thought was a southern continent. Europeans did not return until 1768, when Louis Antoine de Bougainville rediscovered the islands. In 1774, Captain Cook named the islands the New Hebrides, a name that lasted until independence.

In 1825, trader Peter Dillon's discovery of sandalwood on the island of Erromango began a rush that ended in 1830 after a clash between immigrant Polynesian workers and indigenous Melanesians. During the 1860s, planters in Australia, Fiji, New Caledonia, and the Samoa Islands, in need of laborers, encouraged a long-term indentured labor trade called "blackbirding." At the height of the labor trade, more than one-half the adult male population of several of the Islands worked abroad. Fragmentary evidence indicates that the current population of Vanuatu is greatly reduced compared to pre-contact times.

It was at this time that missionaries, both Catholic and Protestant, arrived on the islands. Settlers also came, looking for land on which to establish cotton plantations. When international cotton prices collapsed, they switched to coffee, cocoa, bananas, and, most successfully, coconuts. Initially, British subjects from Australia made up the majority, but the establishment of the Caledonian Company of the New Hebrides in 1882 soon tipped the balance in favor of French subjects. By the turn of the century, the French outnumbered the British two to one.

The jumbling of French and British interests in the islands brought petitions for one or another of the two powers to annex the territory. In 1906, however, France and the United Kingdom agreed to administer the islands jointly. Called the British-French Condominium, it was a unique form of government, with separate governmental systems that came together only in a joint court. Melanesians were barred from acquiring the citizenship of either power.

Challenges to this form of government began in the early 1940s. The arrival of Americans during World War II, with their informal demeanor and relative wealth, was instrumental in the rise of nationalism in the islands. The belief in a mythical messianic figure named John Frum was the basis for an indigenous cargo cult (a movement attempting to obtain industrial goods through magic) promising Melanesian deliverance. Today, John Frum is both a religion and a political party with a member in Parliament.

The first political party was established in the early 1970s and originally was called the New Hebrides National Party. One of the founders was Father Walter Lini, who later became Prime Minister. Renamed the Vanua'aku Pati in 1974, the party pushed for independence; in 1980, the Republic of Vanuatu was created.

GOVERNMENT
The constitution created a republican political system headed by a president who has primarily ceremonial powers and is elected by a two-thirds majority in an electoral college consisting of members of Parliament and the presidents of Regional Councils. The president serves a 5-year term. The president may be removed by the Electoral College for gross misconduct or incapacity. The prime minister, who is the head of government, is elected by a majority vote of a three-fourths quorum of Parliament. The prime minister in turn appoints the Council of Ministers, whose number may not exceed one-fourth of the number of parliamentary representatives. The prime minister and the Council of Ministers constitute the executive government.

Parliament is a 52-member unicameral house elected by all persons over 18 years old. Parliament normally sits for a 4-year term unless dissolved by majority vote of a three-fourths quorum or a directive from the president on the advice of the prime minister. The national Council of Chiefs, called the Malvatu Mauri and elected by district councils of chiefs, advises the government on all matters concerning ni-Vanuatu culture and language.

The Supreme Court consists of a chief justice and up to three other judges. Two or more members of this court may constitute a Court of Appeal. Magistrate courts handle most routine legal matters. The legal system is based on British law. The constitution also provides for the establishment of village or island courts presided over by chiefs to deal with questions of customary law.

Principal Government Officials
President--Iolu Johnson Abbil
Prime Minister--Serge Vohor
Foreign Minister--Joe Natuman

Vanuatu does not have an embassy in Washington. Its mission to the United Nations is located at 800 East Second Avenue, Room 400B, New York, NY 10017. Vanuatu Maritime Services, which provides information on ship registration in Vanuatu, is located at 120 Broadway, Suite 1743, New York, NY 10271.

POLITICAL CONDITIONS
Government and society in Vanuatu tend to divide along linguistic--French and English--lines. Historically, English-speaking politicians such as Walter Lini and other leaders of the Vanua'aku Pati favored early independence, whereas French-speaking political leaders favored continuing association with the colonial administrators, particularly France.

On the eve of independence in 1980, Jimmy Stevens' Nagriamel movement, in alliance with private French interests and backed by American libertarians hoping to establish a tax-free haven, declared the island of Espiritu Santo independent of the new government. Following independence, Vanuatu requested assistance from Papua New Guinea, whose forces restored order on Santo. From then until 1991, the Vanua'aku Pati and its predominantly English-speaking leadership controlled the Vanuatu Government, and Walter Lini became widely considered as the nation's founding father.

In December 1991, and following a split in the Vanua'aku Pati, Maxime Carlot Korman, leader of the Francophone Union of Moderate Parties (UMP), was elected Vanuatu's first Francophone prime minister. He formed a coalition government with Walter Lini's breakaway VP faction, now named the National United Party (NUP). From 1995-2004 government leadership changed frequently due to unstable coalitions within Parliament and within the major parties.

The president dissolved Parliament in May 2004 to forestall a vote of no confidence and called a special election that resulted in losses for most major parties. UMP's leader, Serge Vohor, returned as Prime Minister at the head of an unwieldy coalition government. Following controversy over Vohor's attempt to extend diplomatic relations to Taiwan, he was ousted by a vote of no confidence in December 2004 and replaced by Ham Lini, brother of Walter Lini. The new coalition included 10 parties and featured the former opposition leader, Sato Kilman, as Deputy Prime Minister/Foreign Minister.

Elections were held on September 2, 2008, and a seven-party coalition elected Edward Natapei as Prime Minister with the former Prime Minister, Ham Lini, as Deputy Prime Minister. In November 2009, facing the threat of a vote of no confidence, Prime Minister Natapei replaced Lini and half of his cabinet ministers, drawing from Parliament's 16-member opposition Alliance bloc. Sato Kilman, leader of the Alliance bloc, was appointed Deputy Prime Minister. In December 2010 Natapei was ousted in a vote of no confidence and Kilman was appointed Prime Minister. On April 24, 2011 Kilman himself was ousted in a vote of no confidence by a narrow margin of 26 votes to 25, and three-time Prime Minister Serge Vohor was appointed Prime Minister. Vohor’s cabinet included the only female member of Parliament (MP), Independent MP Eta Rory, as Minister of Agriculture. Labour Party MP Joshua Kalsakau was named Deputy Prime Minister. The next national elections will be held in 2013.

ECONOMY
Vanuatu's economy is primarily agricultural; 80% of the population is engaged in agricultural activities that range from subsistence farming to smallholder farming of coconuts and other cash crops. Copra is by far the most important cash crop (making up more than 35% of the country's exports), followed by timber, beef, and cocoa. Kava root extract exports also have become important. Coconut oil, copra, kava, and beef account for more than 75% of Vanuatu's total agricultural exports, and agriculture accounts for approximately 20% of GDP. Tourism is a key driver of the economy.

The government has maintained Vanuatu's preindependence status as a tax haven and international off-shore financial center. About 2,000 registered institutions offer a wide range of offshore banking, investment, legal, accounting, and insurance and trust-company services. Vanuatu also maintains an international shipping register in New York City. In 2002, following increasing international concern over money laundering, Vanuatu increased oversight and reporting requirements for its off-shore sector.

Vanuatu claims an exclusive economic zone of 735,893 square kilometers and possesses substantial marine resources. Currently, only a limited number of ni-Vanuatu are involved in fishing, while foreign fleets exploit this potential.

Vanuatu's economic growth of 3.4% in 2006 was broad-based and strongly driven by the services sector, especially tourism at 20% of GDP. Other sectors that contributed significantly were construction (15.7%), wholesale and retail sector (12.4%), and the real estate and business service sector (11.2%). The agricultural sector showed improved performance due to better domestic prices for copra. Other items including cocoa, beef, and kava supported the growth. In 2007 tourism again contributed 20% of GDP. Vanuatu continued to experience strong economic growth through 2008, averaging nearly 6%. There was an increase in agricultural output, which was supported by high international commodity prices in mid-2008. While the global financial crisis did not have a severe impact on Vanuatu’s economy, the crisis caused low commodity prices that led to a decline in the domestic production of most commodities. Higher international prices in 2010 for copra, coconut oil, and beef saw an improvement in the agricultural sector. Construction activity, agriculture, tourism, services, and real estate were the main sectors that drove economic growth in 2010.

The Recognized Seasonal Employer (RSE) program is an agreement that allows unskilled Vanuatu laborers, such as fruit pickers and farm workers, to work in New Zealand. Starting from June 2007, RSE is anticipated to bring over 20 million vatu into Vanuatu's economy.

FOREIGN RELATIONS
Vanuatu maintains relations with more than 65 countries, including Russia, the People's Republic of China, Cuba, and Vietnam. However, only Australia, France, New Zealand, and the People's Republic of China maintain embassies, high commissions, or missions in Port Vila.

The government's main concern has been to bolster the economy. In keeping with its need for financial assistance, Vanuatu has joined the Asian Development Bank, the World Bank, the International Monetary Fund, and the Agence de Cooperation Culturelle et Technique.

The government encourages private enterprise, foreign investment, and producer cooperatives. Like other developing countries, Vanuatu is particularly interested in enterprises that add value to local primary products and that provide employment. In less lucrative sectors, the government sets up its own production companies or enters joint ventures with foreign investors.

Since 1980, Australia, the United Kingdom, France, and New Zealand have provided the bulk of Vanuatu's development aid. A number of other countries, including Japan, Canada, and Germany, and various multilateral organizations, such as the Economic and Social Council for Asia and the Pacific, the UN Development Program, the Asian Development Bank, the European Union, and the Commonwealth Development Corporation, also provide developmental aid. The United States, Canada, Australia, New Zealand, the United Kingdom, and Japan also send volunteers. In March 2006 the United States Millennium Challenge Corporation signed a 5-year $65.69 million Compact agreement with Vanuatu. Vanuatu retains strong economic and cultural ties to Australia, New Zealand, and France.

Membership in International Organizations
Vanuatu is a member of the United Nations and its specialized and related agencies, including the World Bank and the International Monetary Fund; Secretariat of the Pacific Community (SPC); Pacific Islands Forum (PIF); Non-Aligned Movement; Commonwealth; Group of 77; and Asian Development Bank (ADB).

U.S.-VANUATU RELATIONS
The United States and Vanuatu established diplomatic relations in 1986. Between 1977 and 1987, Vanuatu received just under $3 million from the U.S. Agency for International Development (USAID), including projects focusing on assisting the transition to indigenous plantation management. In June 1994, the regional USAID office located in Suva, Fiji, was closed due to U.S. Government budgetary cutbacks. The U.S. military retains training links and conducts ad hoc assistance projects in Vanuatu.

In March 2006 the United States Millennium Challenge Corporation signed a 5-year $65.69 million Compact agreement with Vanuatu. The Millennium Challenge program was expected to increase average income per capita by 15% within 5 years and directly impact the lives of more than 65,000 of the rural poor in Vanuatu. The Compact was completed in April 2011 and helped to rehabilitate the two main national roads, the Efate Ring Road and the Santo East Coast Road, and improved the capacity of the Public Works Department to better maintain and manage the country’s transportation infrastructure.

The United States also remains a major financial contributor to international and regional organizations that assist Vanuatu, including the World Bank, UN Children's Fund (UNICEF), World Health Organization (WHO), UN Fund for Population Activities, and Asian Development Bank.

In 1989, the United States concluded a Peace Corps agreement with Vanuatu. The Peace Corps has been welcomed there and currently has over 80 volunteers in-country. The United States also provides security training assistance.

Principal U.S. Embassy Officials
Ambassador--Teddy Taylor (resident in Port Moresby, Papua New Guinea)
Deputy Chief of Mission--Paul Berg
Peace Corps Country Director--Edwin Stice
Millennium Challenge Country Director--Christine Cookson

The mailing address of the U.S. Embassy in Papua New Guinea is P.O. Box 1492, Port Moresby (tel: 675-321-1455; fax: 675-321-3423).

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Saudi Arabia

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May 6, 2011Bureau of Near Eastern Affairs

Background Note: Saudi Arabia



Official Name: Kingdom of Saudi Arabia



PROFILE

Geography
Area: 1,960,582 million sq. km. (784,233 sq. mi.), slightly more than one-fifth the size of the continental United States.
Cities (2006 est.): Capital--Riyadh (pop. 4.3 million). Other cities--Jeddah (3.4 million), Makkah, (1.6 million), Dammam/Khobar/Dhahran, (1.6 million).
Terrain: Primarily desert with rugged mountains in the southwest.
Climate: Arid, with great extremes of temperature in the interior; humidity and temperature are both high along the coast.

People
Nationality: Noun--Saudi(s). Adjective--Saudi Arabian or Saudi.
Population (July 2010 est.): 28.7 million (23.1 million Saudis, 5.6 million foreign nationals).
Annual population growth rate: (2010 est.): 1.8%.
Ethnic groups: Arab (90% of native pop.), Afro-Asian (10% of native pop.).
Religion: Islam.
Language: Arabic (official).
Education: Literacy--total 78.8% (male 84.7%, female 70.8%).
Health: Infant mortality rate (2010 est.)--11.57 deaths/1,000 live births. Life expectancy--male 74 years, female 78 years.
Work force: 6.49 million, about 35% foreign workers (2005 est.); industry--25%; services (including government)--63%; agriculture--12%.

Government
Type: Monarchy with Council of Ministers and Consultative Council.
Unification: September 23, 1932.
Constitution: The Holy Qur'an (governed according to Islamic Law), Shari'a, and the Basic Law.
Branches: Executive--King (chief of state and head of government; rules under the title Custodian of the Two Holy Mosques). Legislative--a Consultative Council with advisory powers was formed September 1993. Judicial--Supreme Court, Supreme Judicial Council, Islamic Courts of First Instance and Appeals.
Administrative divisions: 13 provinces.
Political parties: None; formal political parties are not recognized by the government and have no legal status.

Economy
GDP (2010 est.): $623 billion.
Annual growth rate (2010 est.): 3.8%.
Per capita GDP (2010): $24,200.
Natural resources: Hydrocarbons, gold, uranium, bauxite, coal, iron, phosphate, tungsten, zinc, silver, copper.
Agriculture: Products--dates, grains, livestock, vegetables. Arable land--1.76%.
Industry: Types--petroleum, petrochemicals, cement, fertilizer, light industry.
Trade (2010 est.): Exports--$253 billion: petroleum and petroleum products. Imports--$99 billion: manufactured goods, transportation equipment, clothing and textiles, processed food products. Major trading partners--China, France, Germany, India, Japan, Singapore, South Korea, Taiwan, U.K., U.S.

PEOPLE
Saudi Arabia's 2010 population was estimated to be about 28 million, including about 5.6 million resident foreigners. Until the 1960s, most of the population was nomadic or seminomadic; due to rapid economic and urban growth, more than 95% of the population now is settled. Some cities and oases have densities of more than 1,000 people per square kilometer (2,600 per sq. mi).

Saudi Arabia is known as the birthplace of Islam, which in the century following the Prophet Muhammad's death in 632 A.D. spread west to Spain and east to India. Islam obliges all Muslims to make the Hajj, or pilgrimage to Makkah, at least once during their lifetime if they are able to do so. The cultural environment in Saudi Arabia is highly conservative; the country officially adheres to the strict Wahhabi interpretation of Islamic religious law (Shari'a). Cultural presentations must conform to narrowly defined standards of ethics. Men and women often are not permitted to attend public events together and are segregated in the work place.

Most Saudis are ethnically Arab. Some are of mixed ethnic origin and are descended from Turks, Iranians, Indonesians, Indians, Africans, and others, most of whom immigrated as pilgrims and reside in the Hijaz region along the Red Sea coast. Many Arabs from nearby countries are employed in the kingdom. There also are significant numbers of Asian expatriates mostly from India, Pakistan, Bangladesh, Indonesia, and the Philippines. Westerners in Saudi Arabia number under 100,000.

HISTORY
Except for a few major cities and oases, the harsh climate historically prevented much settlement of the Arabian Peninsula. People of various cultures have lived in the peninsula over a span of more than 5,000 years. The Dilmun culture, along the Gulf coast, was contemporaneous with the Sumerians and ancient Egyptians, and most of the empires of the ancient world traded with the states that existed on the peninsula, which lay along important trade routes.

The Saudi state began in central Arabia in about 1750. A local ruler, Muhammad bin Saud, joined forces with an Islamic reformer, Muhammad Abd Al-Wahhab, to create a new political entity. Over the next 150 years, the fortunes of the Saud family rose and fell several times as Saudi rulers contended with Egypt, the Ottoman Empire, and other Arabian families for control on the peninsula. The modern Saudi kingdom was founded by the late King Abdul Aziz Al Saud (known internationally as Ibn Saud, or "Son of Saud"). In 1902, Abdul Aziz recaptured Riyadh, the Al Saud dynasty's ancestral capital, from the rival Al-Rashid family. Continuing his conquests, Abdul Aziz subdued Al-Hasa in the east, the rest of the central Nejd region, and the Hijaz along the Red Sea coast between 1913 and 1926. In 1932, Abdul Aziz declared these regions unified as the Kingdom of Saudi Arabia.

Boundaries with Jordan, Iraq, and Kuwait were established by a series of treaties negotiated in the 1920s, with two "neutral zones"--one with Iraq and the other with Kuwait--created. The Saudi-Kuwaiti neutral zone was administratively partitioned in 1971, with each state continuing to share the petroleum resources of the former zone equally. Tentative agreement on the partition of the Saudi-Iraqi neutral zone was reached in 1981, and partition was finalized by 1983. The country's southern boundary with Yemen was partially defined by the 1934 Treaty of Taif, which ended a brief border war between the two states. A June 2000 treaty further delineated portions of the boundary with Yemen. The location and status of Saudi Arabia's boundary with the United Arab Emirates is not final; a de facto boundary reflects a 1974 agreement. The border between Saudi Arabia and Qatar was resolved in March 2001.

King Abdul Aziz died in 1953 and was succeeded by his eldest son, Saud, who reigned for 11 years. In 1964, Saud abdicated in favor of his half-brother, Crown Prince Faisal, who had served as both prime minister and foreign minister. Because of fiscal difficulties, King Saud had been persuaded in 1958 to delegate direct conduct of Saudi Government affairs to Faisal as prime minister; Saud briefly regained control of the government in 1960-62. In October 1962, Faisal outlined a broad reform program, stressing economic development. Proclaimed King in 1964 by senior royal family members and religious leaders, Faisal also continued to serve as prime minister. This practice has been followed by subsequent kings.

The mid-1960s saw external pressures generated by Saudi-Egyptian differences over Yemen. When civil war broke out in 1962 between Yemeni royalists and republicans, Egyptian forces entered Yemen to support the new republican government, while Saudi Arabia backed the royalists. Tensions subsided only after 1967, when Egypt withdrew its troops from Yemen.

Saudi forces did not participate in the Six-Day (Arab-Israeli) War of June 1967, but the government later provided annual subsidies to Egypt, Jordan, and Syria to support their economies. During the 1973 Arab-Israeli war, Saudi Arabia participated in the Arab oil boycott of the United States and the Netherlands. A founding member of the Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia had joined other member countries in moderate oil price increases beginning in 1971. After the 1973 war, the price of oil rose substantially, dramatically increasing Saudi Arabia's wealth and political influence.

In 1975, King Faisal was assassinated by a nephew, who was executed after an extensive investigation concluded that he acted alone. Faisal was succeeded by his half-brother Khalid as King and Prime Minister; their half-brother Prince Fahd was named Crown Prince and First Deputy Prime Minister. King Khalid empowered Crown Prince Fahd to oversee many aspects of the government's international and domestic affairs. Economic development continued rapidly under King Khalid, and the kingdom assumed a more influential role in regional politics and international economic and financial matters.

In June 1982, King Khalid died, and Fahd became King and Prime Minister in a smooth transition. Another half-brother, Prince Abdallah, Commander of the Saudi National Guard, was named Crown Prince and First Deputy Prime Minister. King Fahd's full brother, Prince Sultan, the Minister of Defense and Aviation, became Second Deputy Prime Minister. Under King Fahd, the Saudi economy adjusted to sharply lower oil revenues resulting from declining global oil prices. Saudi Arabia supported neutral shipping in the Gulf during periods of the Iran-Iraq war and aided Iraq's war-strained economy. King Fahd played a major part in bringing about the August 1988 cease-fire between Iraq and Iran and in organizing and strengthening the Gulf Cooperation Council (GCC), a group of six Arabian Gulf states dedicated to fostering regional economic cooperation and peaceful development.

In 1990-91, King Fahd played a key role before and during the Gulf war, helping consolidate the coalition of forces against Iraq and define the tone of the operation as a multilateral effort to reestablish the sovereignty and territorial integrity of Kuwait. Acting as a rallying point and personal spokesman for the coalition, King Fahd helped bring together his nation's GCC, Western, and Arab allies, as well as nonaligned nations from Africa and the emerging democracies of Eastern Europe. He used his influence as Custodian of the Two Holy Mosques to persuade other Arab and Islamic nations to join the coalition.

King Fahd suffered a stroke in November 1995. From 1997, Crown Prince Abdallah took on much of the day-to-day responsibilities of running the government. Upon King Fahd's death on August 1, 2005, Abdallah assumed the throne as King. Prince Sultan, Minister of Defense and Aviation, became Crown Prince and First Deputy Prime Minister. Since ascending to the throne, King Abdallah has continued to pursue an incremental program of social, economic, and political reforms. In September 2009, he inaugurated the King Abdallah University of Science and Technology (KAUST), a graduate-level research institution and Saudi Arabia’s first co-educational university.

GOVERNMENT AND POLITICAL CONDITIONS
The central institution of Saudi Arabian Government is the monarchy. The Basic Law adopted in 1992 declared that Saudi Arabia is a monarchy ruled by the sons and grandsons of King Abdul Aziz Al Saud, and that the Holy Qur'an is the constitution of the country, which is governed on the basis of Islamic law (Shari'a). There are no officially recognized political parties. Following the first municipal elections in 2005, elections to select half of all municipal councilors have been scheduled for September 2011. The king has broad powers with limitations coming from a need to observe Shari'a and other Saudi traditions. He also must maintain consensus among the Saudi royal family, religious leaders (ulema), and other important elements in Saudi society. In the past the leading members of the royal family chose the king from among themselves with the subsequent approval of the ulema. In November 2006, King Abdallah established an Allegiance Commission that will select future kings and crown princes, a step designed to help formalize the selection process.

Saudi kings gradually have developed a central government. Since 1953, the Council of Ministers, appointed by and responsible to the king, has advised on the formulation of general policy and directed the activities of the growing bureaucracy. This council consists of the king (as prime minister), the first and second deputy prime ministers, 20 ministers, two ministers of state, and a small number of advisers and heads of major autonomous organizations.

Legislation is by resolution of the Council of Ministers and the Consultative Council, ratified by royal decree, and must be compatible with Shari'a. Justice is administered according to Shari'a by a system of religious courts. A 2007 law created a new Supreme Court to replace the Supreme Judicial Council (SJC) as Saudi Arabia’s highest court authority. The same law transfers powers that the Ministry of Justice formerly exercised to the SJC, such as the authority to ability to establish and abolish courts, and name judges to the Courts of Appeal and First Instance. The independence of the judiciary is protected by law. The king has the authority to hear appeals and has the power to pardon in cases where the punishment is not ordained in the Qur'an. Access to high officials (usually at a public audience, or majlis) and the right to petition them directly are well-established traditions.

The kingdom is divided into 13 provinces governed by princes or close relatives of the royal family. All governors are appointed by the king.

In March 1992, King Fahd issued several decrees outlining the basic statutes of government and codifying for the first time procedures concerning the royal succession. Fahd's political reform program also provided for the establishment of a national Consultative Council, with appointed members having advisory powers to review and give advice on issues of public interest. It also outlined a framework for councils at the provincial level.

In September 1993, King Fahd issued additional reform decrees, appointing the members of the national Consultative Council and spelling out procedures for the new council's operations. He announced reforms regarding the Council of Ministers, including term limitations of 4 years and regulations to prohibit conflict of interest for ministers and other high-level officials. The members of 13 provincial councils and the councils' operating regulations also were announced in September 1993. In February, March, and April 2005, Saudis voted in the country's first municipal elections in more than 40 years. Only male, nonmilitary citizens at least 21 years old were permitted to vote.

In July 1997, the membership of the Consultative Council was expanded from 60 to 90 male members, and again in May 2001 from 90 to 120 members. In 2005, membership was expanded to 150 members. The Council also includes female non-voting advisors; in 2010, their numbers were increased from 10 to 13. Membership has changed significantly during expansions of the council as many members have not been reappointed. The role of the royally appointed Council is gradually expanding as it gains experience.

In November 2006, King Abdallah announced the formation of an Allegiance Commission which, in the future, will select a king and crown prince upon the death or incapacitation of either. A December 2007 royal decree named the initial members of the Commission, all of whom are sons, grandsons, or great-grandsons representing each branch of the descendants of the kingdoms' founder, King Abdul Aziz. Only direct male descendants of Abdul Aziz are eligible to become crown prince or king.

Principal Government Officials
King, Prime Minister, Custodian of the Two Holy Mosques--Abdallah bin Abdul Aziz Al Saud
Minister of Foreign Affairs--Saud al-Faisal bin Abdul Aziz Al Saud
Ambassador to the U.S.--Adel al-Jubeir

The Embassy of the Kingdom of Saudi Arabia is located at 601 New Hampshire Avenue NW, Washington, DC 20037; tel. 202-342-3800.

ECONOMY
Oil was discovered in Saudi Arabia by U.S. geologists in the 1930s, although large-scale production did not begin until after World War II. Oil wealth has made possible rapid economic development, which began in earnest in the 1960s and accelerated spectacularly in the 1970s, transforming the kingdom.

Saudi oil reserves are the largest in the world, and Saudi Arabia is the world's leading oil producer and exporter. Oil accounts for more than 90% of the country's exports and nearly 75% of government revenues. Proven reserves are estimated to be 263 billion barrels, about one-quarter of world oil reserves.

More than 95% of all Saudi oil is produced on behalf of the Saudi Government by the parastatal giant Saudi ARAMCO. In June 1993, Saudi ARAMCO absorbed the state marketing and refining company (SAMAREC), becoming the world's largest fully integrated oil company. Most Saudi oil exports move by tanker from Gulf terminals at Ras Tanura and Ju'aymah. The remaining oil exports are transported via the east-west pipeline across the kingdom to the Red Sea port of Yanbu.

Due to a sharp rise in petroleum revenues in 1974 following the 1973 Arab-Israeli war, Saudi Arabia became one of the fastest-growing economies in the world. It enjoyed a substantial surplus in its overall trade with other countries; imports increased rapidly; and ample government revenues were available for development, defense, and aid to other Arab and Islamic countries.

But higher oil prices led to development of more oil fields around the world and reduced global consumption. The result, beginning in the mid-1980s, was a worldwide oil glut, which introduced an element of planning uncertainty for the first time in a decade. Saudi oil production, which had increased to almost 10 million barrels per day (b/d) during 1980-81, dropped to about 2 million b/d in 1985. Budgetary deficits developed, and the government drew down its foreign assets. Responding to financial pressures, Saudi Arabia gave up its role as the "swing producer" within OPEC in the summer of 1985 and accepted a production quota. Since then, Saudi oil policy has been guided by a desire to maintain market and quota shares and to support stability in the international oil market.

Saudi Arabia was a key player in coordinating the successful 1999 campaign of OPEC and other oil-producing countries to raise the price of oil to its highest level since the Gulf War by managing production and supply of petroleum. That same year saw establishment of the Supreme Economic Council to formulate and better coordinate Saudi economic development policies in order to accelerate institutional and industrial reform.

In response to increasing international demand for oil, Saudi ARAMCO engaged in an expansion of its oil production capacity and raised its capacity from 11 million barrels/day (mb/d) to 12 mb/d in 2009. Saudi ARAMCO is also increasing production of associated and non-associated natural gas to feed the expanding petrochemical sector. Notably, Saudi Arabia has awarded contracts to foreign companies to conduct gas exploration in selected regions of the country--the first such foreign participation in the petroleum sector upstream since the nationalization of ARAMCO began in the 1970s.

Saudi Arabia continues to pursue rapid industrial expansion, led by the petrochemical sector. The Saudi Basic Industries Corporation (SABIC), a parastatal petrochemical company, is now one of the world's leading petrochemical producers, and the government promotes private sector involvement in petrochemicals. The government also plans new investments in the mining sector and in refining,

After Saudi Arabia announced its intention to join the World Trade Organization (WTO), negotiations focused on increasing market access to foreign goods and services and the timeframe for becoming fully compliant with WTO obligations. In April 2000, the government established the Saudi Arabian General Investment Authority to encourage foreign direct investment in the country. Saudi Arabia signed a Trade Investment Framework Agreement with the U.S. in July 2003, and joined the WTO in December 2005.

Through 5-year development plans, the government has sought to allocate its petroleum income to transform its relatively undeveloped, oil-based economy into that of a modern industrial state while maintaining the kingdom's traditional Islamic values and customs. Although economic planners have not achieved all their goals, the economy has progressed rapidly. Oil wealth has increased the standard of living of most Saudis. However, significant population growth has strained the government's ability to finance further improvements in the country's standard of living. Heavy dependence on petroleum revenue continues, but industry and agriculture now account for a larger share of economic activity. The mismatch between the job skills of Saudi graduates and the needs of the private job market at all levels remains the principal obstacle to economic diversification and development; about 4.6 million non-Saudis are employed in the economy.

Saudi Arabia's first two development plans, covering the 1970s, emphasized infrastructure. The results were impressive--the total length of paved highways tripled, power generation increased by a multiple of 28, and the capacity of the seaports grew tenfold. For the third plan (1980-85), the emphasis changed. Spending on infrastructure declined, but it rose markedly on education, health, and social services. The share for diversifying and expanding productive sectors of the economy (primarily industry) did not rise as planned, but the two industrial cities of Jubail and Yanbu--built around the use of the country's oil and gas to produce steel, petrochemicals, fertilizer, and refined oil products--were largely completed.

In the fourth plan (1985-90), the country's basic infrastructure was viewed as largely complete, but education and training remained areas of concern. Private enterprise was encouraged, and foreign investment in the form of joint ventures with Saudi public and private companies was welcomed. The private sector became more important, rising to 70% of non-oil GDP by 1987. While still concentrated in trade and commerce, private investment increased in industry, agriculture, banking, and construction companies. These private investments were supported by generous government financing and incentive programs. The objective was for the private sector to have 70% to 80% ownership in most joint venture enterprises.

The fifth plan (1990-95) emphasized consolidation of the country's defenses; improved and more efficient government social services; regional development; and, most importantly, creating greater private-sector employment opportunities for Saudis by reducing the number of foreign workers.

The sixth plan (1996-2000) focused on lowering the cost of government services without cutting them and sought to expand educational training programs. The plan called for reducing the kingdom's dependence on the petroleum sector by diversifying economic activity, particularly in the private sector, with special emphasis on industry and agriculture. It also continued the effort to "Saudiize" the labor force.

The seventh plan (2000-2004) focused more on economic diversification and a greater role of the private sector in the Saudi economy. For the period 2000-04, the Saudi Government aimed at an average GDP growth rate of 3.16% each year, with projected growths of 5.04% for the private sector and 4.01% for the non-oil sector. The government also set a target of creating 817,300 new jobs for Saudi nationals.

The eighth plan (2005-2010) again focused on economic diversification in addition to education and inclusion of women in society. The plan called for establishing new universities and new colleges with technical specializations. Privatization as well as emphases on a knowledge-based economy and tourism would help in the goal of economic diversification.

The ninth plan (2010-2014) aspires to eliminate poverty and increase development in infrastructure, medical services, educational capacity, and residential housing. The plan also aims to increase real GDP by 15% over 5 years and calls for substantial government investment in human resource development, in order to decrease Saudi unemployment from 9.6% to 5.5%.

FOREIGN RELATIONS
Saudi foreign policy objectives are to maintain its security and its paramount position on the Arabian Peninsula, defend general Arab and Islamic interests, promote solidarity among Islamic governments, and maintain cooperative relations with other oil-producing and major oil-consuming countries.

Saudi Arabia signed the UN Charter in 1945. The country plays a prominent and constructive role in the International Monetary Fund, the World Bank, and Arab and Islamic financial and development assistance institutions. One of the largest aid donors in the world, it still gives some aid to a number of Arab, African, and Asian countries. Jeddah is the headquarters of the Secretariat of the Organization of the Islamic Conference and its subsidiary organization, the Islamic Development Bank, founded in 1969.

Membership in the 11-member OPEC and in the technically and economically oriented Arab producer group--the Organization of Arab Petroleum Exporting Countries--facilitates coordination of Saudi oil policies with other oil-exporting governments. As the world's leading exporter of petroleum, Saudi Arabia has a special interest in preserving a stable and long-term market for its vast oil resources by allying itself with healthy Western economies which can protect the value of Saudi financial assets. It generally has acted to stabilize the world oil market and tried to moderate sharp price movements.

The Saudi Government frequently helps mediate regional crises and supports the Middle East peace process. A charter member of the Arab League, Saudi Arabia supports the position that Israel must withdraw from the territories which it occupied in June 1967, as called for in United Nations Security Council Resolution 242. Saudi Arabia supports a peaceful resolution of the Arab-Israeli conflict but rejected the Camp David accords, claiming that they would be unable to achieve a comprehensive political solution that would ensure Palestinian rights and adequately address the status of Jerusalem. Although Saudi Arabia broke diplomatic relations with and suspended aid to Egypt in the wake of Camp David, the two countries renewed formal ties in 1987. In March 2002, then-Crown Prince Abdallah offered a Middle East peace plan, now known as the Arab Peace Initiative, at the annual summit of the Arab League in which Arab governments would offer "normal relations and the security of Israel in exchange for a full Israeli withdrawal from all occupied Arab lands, recognition of an independent Palestinian state with Jerusalem as its capital, and the return of Palestinian refugees." In March 2007 the Arab League reiterated its support for the Arab Peace Initiative by emphasizing that it could be the foundation for a broad Arab-Israeli peace. In November 2007, Saudi Foreign Minister Prince Saud al-Faisal attended the Annapolis Conference, along with more than 50 representatives of concerned countries and international organizations. The conference was convened to express the broad support of the international community for the Israeli and Palestinian leaders' courageous efforts and was a launching point for negotiations designed to lead to the establishment of a Palestinian state and the realization of Israeli-Palestinian peace.

Saudi Arabia supports the establishment of a unified, independent, and sovereign Iraq. The kingdom is a charter member of the International Compact with Iraq and participates in the Expanded Iraq Neighbors process. In January 2008, Foreign Minister Prince Saud al-Faisal reiterated Saudi Arabia's intention to open a diplomatic mission in Baghdad and appoint an ambassador.

In 1990-91, Saudi Arabia played an important role in the Gulf War, developing new allies and improving existing relationships between Saudi Arabia and some other countries, but also suffering diplomatic and financial costs. Relations between Saudi Arabia and Tunisia, Algeria, and Libya deteriorated. Each country had remained silent following Iraq's invasion of Kuwait but called for an end to violence once the deployment of coalition troops began. Relations between these countries and Saudi Arabia later returned to their pre-war status. Saudi Arabia's relations with those countries which expressed support for Saddam Hussein's invasion of Kuwait--Yemen, Jordan, and Sudan--were severely strained during and immediately after the war. For example, several hundred thousand Yemenis were expelled from Saudi Arabia after the Government of Yemen announced its position, thus exacerbating an existing border dispute. Saudi Arabia’s relations with the Yemeni Government have improved, but the current instability in Yemen remains a significant concern to the Saudi Government. The Palestine Liberation Organization's support for Iraq cost it financial aid as well as good relations with Saudi Arabia and other Gulf states. Saudi Arabia's relations with Jordan and the Palestinian Authority later improved, with the Saudi Government providing assistance for the Palestinian Authority.

During and after the Gulf War, the Government of Saudi Arabia provided water, food, shelter, and fuel for coalition forces in the region, and also made monetary payments to some coalition partners. Saudi Arabia's combined costs in payments, foregone revenues, and donated supplies were $55 billion. More than $15 billion went toward reimbursing the United States alone.

Since ascending to the throne, King Abdallah has followed a more activist foreign policy, offering Saudi assistance and support in efforts to resolve regional crises in Lebanon, Sudan, and Somalia; fostering Israeli-Palestinian peace efforts; and increasing Saudi diplomatic engagement around the world. In particular, he has pursued an Interfaith Dialogue Initiative to encourage religious tolerance on a global level, which was endorsed in a session of the UN General Assembly in November 2008.

U.S.-SAUDI ARABIAN RELATIONS
Saudi Arabia's unique role in the Arab and Islamic worlds, its possession of the world's largest reserves of oil, and its strategic location make its friendship important to the United States. Diplomatic relations were established in 1933; the U.S. embassy opened in Jeddah in 1944 and moved to Riyadh in 1984. The Jeddah embassy became a U.S. consulate general. The U.S. consulate general in Dhahran opened in 1944 in response to the growing oil-related U.S. presence in eastern Saudi Arabia.

The United States and Saudi Arabia share common concerns about regional security, oil exports and imports, and sustainable development. Close consultations between the U.S. and Saudi Arabia have developed on international, economic, and development issues such as the Middle East peace process and shared interests in the Gulf. The continued availability of reliable sources of oil, particularly from Saudi Arabia, remains important to the prosperity of the United States as well as to Europe and Japan. Saudi Arabia is one of the leading sources of imported oil for the United States, providing more than one million barrels/day of oil to the U.S. market. The U.S. is Saudi Arabia's largest trading partner, and Saudi Arabia is the largest U.S. export market in the Middle East.

In addition to economic ties, a longstanding security relationship continues to be important in U.S.-Saudi relations. The U.S. Army Corps of Engineers has a role in military and civilian construction activities in the kingdom reaching back to the 1950s. A U.S. military training mission established at Dhahran in 1953 provides training and support in the use of weapons and other security-related services to the Saudi armed forces. In 1973, another security assistance organization (SAO) was established to assist in the modernization of the Saudi Arabian National Guard. More recently a SAO was authorized to train and equip a Facility Security Force, part of the Ministry of Interior. All three of these SAOs are funded through the U.S. Foreign Military Sales (FMS) program. The United States has sold Saudi Arabia military aircraft (F-15s, AWACS, and UH-60 Blackhawks), air defense weaponry (Patriot and Hawk missiles), armored vehicles (M1A2 Abrams tanks and M-2 Bradley infantry fighting vehicles), and other equipment. In September 2010 the U.S. announced a major new FMS program to sell fighter aircraft and helicopters to the Saudi military services in support of defense modernization plans.

Although Saudi Arabia's relations with the United States were strained after September 11, 2001, Saudi Arabia is now one of the United States' strongest partners against terrorism. Fifteen of the suicide bombers in the attacks of September 11 were Saudi citizens. In May 2003, a terrorist organization directly affiliated with al-Qaeda launched a violent campaign of terror in Saudi Arabia. On May 12, suicide bombers killed 35 people, including nine Americans, in attacks at three housing compounds for Westerners in Riyadh. On November 8, 2003, terrorists attacked another compound housing foreign workers from mainly Arab countries. At least 18 people, including five children, died in this attack, and more than 100 were injured. On May 1, 2004, terrorists killed two Americans in the Yanbu oil facility in the western part of the country. On May 29, 2004, terrorists killed one American and wounded several others in attacks on an official building and housing compound in al-Khobar in the Eastern Province. On June 6, terrorists shot and killed a BBC journalist. On June 9 and June 12, 2004, terrorists killed Americans Robert Jacobs and Kenneth Scroggs. On June 18, 2004, terrorists kidnapped and beheaded American Paul Johnson. On December 6, 2004, terrorists attacked the U.S. Consulate in Jeddah, killing five consulate employees. Terrorists also targeted and killed other foreign nationalities during this time. As a result, in 2005, the Saudi Arabian Government enacted new laws to increase punishment for terrorist-related crimes.

Saudi security services have waged an active counterterrorism campaign that has largely neutralized this terrorist organization, though sporadic instances of terrorism still occur. In May 2006, terrorists attempted to attack the major ARAMCO oil-processing facility at Abqaiq. In February 2007, four French nationals were killed in western Saudi Arabia in a suspected terrorist attack. In August 2009, an al-Qaeda in the Arabian Peninsula (AQAP) suicide bomber attempted to assassinate a Saudi royal and senior Ministry of Interior official.

Saudi Arabia is a strong partner in the campaign against terrorism, providing military, diplomatic, and financial cooperation. Counterterrorism cooperation between Saudi Arabia and the United States increased significantly after the May 12, 2003, bombings in Riyadh and continues today. In February 2005, the Saudi Government sponsored the first-ever Counterterrorism International Conference in Riyadh. The Saudis were instrumental in thwarting the planned October 2010 “printer bomb” attack against the United States. They also provided crucial information on the planned May 2010 Times Square terrorist attack. In addition, they work closely with U.S. law enforcement to ensure the security of both countries' national security interests.

Human Rights
Despite generally good relations, the United States remains concerned about human rights conditions in Saudi Arabia. Principal human rights issues include abuse of prisoners and incommunicado detention; prohibitions or severe restrictions on freedom of speech, press, peaceful assembly and association, and religion; denial of the right of citizens to change their government; systematic discrimination against women and ethnic and religious minorities; and suppression of workers' rights.

Principal U.S. Officials
Ambassador--James B. Smith
Deputy Chief of Mission--Susan L. Ziadeh
Counselor for Consular Affairs--Glen Keiser
Counselor for Economic Affairs--Angus Simmons
Counselor for Management Affairs--Alison Barkley
Counselor for Political Affairs--Lisa Carle
Counselor for Political-Military Affairs--Scott McGehee
Counselor for Public Affairs--Bonnie Gutman
Consul General, Dhahran--Timothy Pounds
Consul General, Jeddah--Tom Duffy

The U.S. Embassy in Saudi Arabia is located in the Diplomatic Quarter of Riyadh (tel. 966-1-488-3800). The Consulate General in Jeddah is located on Palestine Road, Ruwais, Jeddah (tel. 966-2-667-0080); and the Consulate General in Dhahran is located between ARAMCO Headquarters and the King Abdul Aziz Airbase (tel. 966-3-330-3200). The embassy and consulates are open for business Saturday through Wednesday, in accordance with the official workweek of Saudi Arabia.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Palau

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May 12, 2011Bureau of East Asian and Pacific Affairs

Background Note: Palau



Official Name: Republic of Palau



PROFILE

Geography
Area: 458 sq. km. (about 190 sq. mi.) in eight main islands plus more than 250 islets.
Cities: Capital--Melekeok (pop. 391).
Terrain: Varies from mountainous main island to smaller, reef-rimmed coral islands.
Climate: Tropical.

People
Nationality: Noun and adjective--Palauan.
Population: Approximately 20,000 (non-Palauan population, approx. 6,000). Age structure--less than 15 years old, 5,150; 16-64 years old, 13,600; more than 65 years old, 1,130.
Population growth rate: 1.3%.
Ethnic groups: Palauans are Micronesian with Malayan and Melanesian elements.
Religion: Roman Catholic, Protestant, Modekngei (an indigenous Palauan religion).
Languages: English (official in all 16 states), Palauan.
Education: Literacy--95.2%.
Health: Life expectancy--male 68 yrs.; female 76 yrs. Infant mortality rate--16.2/1,000.
Work force: Public sector--33%; private sector--67%.

Government
Type: Constitutional republic in free association with United States.
Independence (from U.S.-administered UN trusteeship): October 1, 1994.
Constitution: January 1, 1981.
Branches: Executive--president (head of state and government), vice president, cabinet. Legislative--bicameral parliament elected by popular vote. Judicial--Supreme Court, National Court, Court of Common Pleas, and the Land Court.

Economy
GDP (2009 est.): $178.4 million.
GDP per capita (2009 est.): $8,941.
National income (GDP + foreign assistance): estimated to be over $200 million.
National income per capita: estimated at $10,000.
GDP composition by sector: Trade--21%, public administration--20%, construction--15%, hotels and restaurants--10%, finance and insurance--8%, transport and communication--8%.
Industry: Types--trade, government, construction, tourism.
Trade: Exports ($5.9 million, 2004)--fish, handicrafts. Export markets--U.S., Japan, and Taiwan. Imports ($129.5 million, 2008)--fuel and related minerals, machinery and transport equipment, beverages and tobacco, manufactured goods, and food and live animals. Import sources--U.S. (Guam), Japan, Singapore, Taiwan, and Korea.
External debt (2006): $38 million.
Currency: U.S. dollar.

GEOGRAPHY AND PEOPLE
The Republic of Palau consists of eight principal islands and more than 250 smaller ones lying roughly 500 miles southeast of the Philippines. The islands of Palau constitute part of the Caroline Islands chain. About 64% of Palauans live in Koror State's capital city, Koror. (Note: Government offices are located in a new National Capitol Building complex located at Ngerulmud, Melekeok State.)

HISTORY
Palau was initially settled more than 4,000 years ago, probably by migrants from what today is Indonesia. British traders became prominent visitors in the 18th century, followed by expanding Spanish influence in the 19th century. Following its defeat in the Spanish-American War, Spain sold Palau and most of the rest of the Caroline Islands to Germany in 1899. Control passed to Japan in 1914 and then to the United States under United Nations auspices in 1947 as part of the Trust Territory of the Pacific Islands.

Four of the Trust Territory districts formed a single federated Micronesian state in 1979, but this eventually dissolved as the individual districts--long culturally distinct--opted for more locally popular status. Palau approved a new constitution in 1981, subsequently signing a Compact of Free Association with the United States in 1982. After eight referenda and an amendment to the Palauan constitution, the Compact went into effect on October 1, 1994, marking Palau's emergence from trusteeship to independence.

GOVERNMENT
Palau is a democratic republic with directly elected executive and legislative branches. Presidential elections take place every 4 years, at the same time as the United States' presidential election, to select the president and the vice president, who now run as a team. The Palau National Congress (Olbiil era Kelulau) has two houses. The Senate has 13 members elected nationwide. The House of Delegates has 16 members, one each from Palau's 16 states. All of the legislators serve 4-year terms. Each state also elects its own governor and legislature.

The Council of Chiefs, comprising the highest traditional chiefs from each of the 16 states, is an advisory body to the president. The Council is consulted on matters concerning traditional laws and customs.

The judicial system consists of the Supreme Court--with trial and appellate divisions--the Court of Common Pleas, and the Land Court. (Palau's constitution has a provision for an additional National Court, but this is not currently active.)

In November 2008 Palauans elected a new president and vice president: Johnson Toribiong and Kerai Mariur. They took office on January 15, 2009. The same elections brought sweeping change to the legislature and passed more than 20 amendments to the constitution.

Principal Government Officials
Head of State and Government--President Johnson Toribiong
Vice President--Kerai Mariur
Ambassador to the U.S.--Hersey Kyota
Ambassador to the UN--Stuart Beck

Palau maintains an embassy at 1700 Pennsylvania Avenue, Suite 400, Washington, DC 20006 (tel: 202-452-6814, fax: 202-452-6281). The Republic of Palau's Mission to the United Nations is located at 866 United Nations Plaza, Suite 575, New York, New York 10017 (tel: 212-813-0310, fax: 212-813-0317). Palau also has embassies in Japan, Philippines, and Taiwan.

POLITICAL CONDITIONS
The government is stable, with national elections held every 4 years in the executive branch and Congress. Elections are free and fair, and candidates rely heavily on media campaigns, town meetings, and rallies. There are no political parties, and candidates run on their own platforms.

Legislation making Palau an "offshore" financial center was passed by the Senate in 1998. In 2001 Palau passed its first bank regulation and anti-money laundering laws.

ECONOMY
Palau's per capita GDP of $8,941 makes it one of the wealthier Pacific Island states. Nominal GDP increased by an annual average of nearly 14% from 1983 to 1990, and by an annual rate of over 10% from 1991 to 1997. Growth turned sharply negative in 1998 and 1999 as a result of the Asian financial crisis, but a gradual rebound followed, and the economy grew by 5.6% in 2007.

Tourism (and its attendant infrastructure changes) is Palau's main industry. Its major draws are its diverse and pristine marine environment, and its above-water tropical island beauty. The number of visitors--34% from Japan, 26% from Taiwan, 18% from Korea, and 11% from the U.S.--was 85,593 in 2010, a 10% increase from 2009. Continental Airlines has direct flights to Palau from Guam and the Philippines. Delta Airlines has weekly non-stop flights from Narita, Japan to Palau. Japan Airlines runs chartered flights from Tokyo, and Korean Airlines does the same from Seoul on a seasonal basis.

Palauan tourism and environmental authorities would like to adjust the industry, simultaneously decreasing tourist volume and increasing income by attracting more high-dollar tourists.

The service sector dominates the Palauan economy, contributing more than 50% of GDP and employing more than half of the work force. The government alone employs about 30% of workers and accounts for 20% of the GDP.

Construction is an important industrial activity, contributing over 15% of GDP. Several large infrastructure projects, roads, and hotels have boosted this sector's recent contribution to GDP.

Agriculture is mainly on a subsistence level, the principal crops being coconuts, taro, and bananas. Fishing is a potential source of revenue, but the islands' tuna output dropped by over one-third during the 1990s. Fishing industry revenues are mostly from license fees from fishing vessels.

One of the government's main responsibilities is administering external assistance, and the main economic challenge confronting Palau is to ensure the long-term viability of its economy by reducing its reliance on foreign assistance.

Under the terms of the Compact of Free Association with the United States, Palau received more than $800 million in direct assistance over 15 years and exercised its prerogative to participate in a wide range of federal programs. In early September 2010, the United States and Palau concluded a 15-year comprehensive review of the Compact. A wide range of federal programs will continue for the next 15 years. By the end of 2010, the value of a trust fund set up under the Compact was approximately $160 million.

FOREIGN RELATIONS
Palau gained its independence October 1, 1994 with the entry into force of the Compact of Free Association with the United States. Palau was the last component of the Trust Territory of the Pacific Islands to gain its independence. Under the Compact, the U.S. remains responsible for Palau's defense for 50 years. The two countries concluded a comprehensive review of the Compact in 2010.

Palau is a sovereign nation and conducts its own foreign relations. Since independence, Palau has established diplomatic relations with a number of nations, including many of its Pacific neighbors, and is one of two dozen or so nations that have diplomatic relations with Taiwan. Palau was admitted to the United Nations on December 15, 1994, and has since joined a number of other international organizations. Palau is a dependable supporter of U.S. positions in the UN.

Principal U.S. Official
Ambassador--Helen Patricia Reed-Rowe

The mailing address for the U.S. Embassy is P.O. Box 6028, Republic of Palau 96940. Telephone: 680-587-2920. Fax: 680-587-2911. Email: USembassyKoror@palaunet.com.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Italy

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May 12, 2011Bureau of European and Eurasian Affairs

Background Note: Italy



Official Name: Italian Republic



PROFILE

Geography
Area: 301,225 sq. km. (116,303 sq. mi.); about the size of Georgia and Florida combined.
Cities: Capital--Rome (pop. 2.8 million, 3.7 million metro). Other cities--Milan (1.3 million, 3.9 metro), Naples (975,000, 3 million metro), Turin (900,000, 2.1 million metro).
Terrain: Mostly rugged and mountainous.
Climate: Generally mild Mediterranean; cold northern winters.

People
Nationality: Noun and adjective--Italian(s).
Population (January 2011 est.): 60.6 million.
Annual population growth rate (2010 est.): 0.04%, mostly due to immigration.
Ethnic groups: Primarily Italian, but there are small groups of German-, French-, Slovene-, and Albanian-Italians.
Religion: Roman Catholic (majority).
Language: Italian (official).
Education: Years compulsory--16. Literacy--98%.
Health: Infant mortality rate--3.7/1,000 live births. Life expectancy--79.1 years for men; 84.3 years for women.
Work force (25.01 million, 2010): Services--67%; industry and commerce--29%; agriculture--4%. Unemployment rate is 8.5%.

Government
Type: Republic since June 2, 1946.
Constitution: January 1, 1948.
Branches: Executive--president (chief of state), Council of Ministers (cabinet) headed by the president of the council (prime minister). Legislative--bicameral parliament: 630-member Chamber of Deputies, 315-member Senate (plus a varying number of Senators “for life”). Judicial--independent constitutional court and lower magistracy.
Subdivisions: 94 provinces, 20 regions.
Political parties: People of Liberty, Democratic Party, Northern League, Future and Liberty, Italy of Values, Union of the Center, Movement for Autonomy.
Suffrage: Vote for House is universal over 18; vote for Senate is universal over 25.

Economy
GDP (purchasing power parity, 2010): $1.77 trillion.
GDP per capita (purchasing power parity, 2010): $29,400.
GDP growth: 1.3% (2010); -5.2% (2009); -1.3% (2008); 1.5% (2007); 2.0% (2006); 0.7% (2005); 1.5% (2004), 0.0% (2003 est.); 0.5% (2002); 1.8% (2001).
Natural resources: Fish and natural gas.
Agriculture: Products--wheat, rice, grapes, olives, citrus fruits, potatoes, sugar beets, soybeans beef, dairy products.
Industry: Types--tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, ceramics.
Trade: Exports (2010)--$447.2 billion f.o.b.: mechanical products, textiles and apparel, transportation equipment, metal products, chemical products, food and agricultural products. Partners (2009)--Germany 12.7%, France 11.6%, U.S. 5.9%, Spain 5.7%, U.K. 5.1%. Imports (2010)--$483 billion c.i.f.: machinery and transport equipment, foodstuffs, ferrous and nonferrous metals, wool, cotton, energy products. Partners (2008)--Germany 16.7%, France 8.9%, China 6.5%, Netherlands 5.7%, Spain 4.4%, Russia 4.1%, Belgium 4.0%.

PEOPLE AND HISTORY
Italy is largely homogeneous linguistically and religiously but is diverse culturally, economically, and politically. Italy has the fifth-highest population density in Europe--about 200 persons per square kilometer (about 500 per sq. mi.). Minority groups are small, the largest being the German-speaking people of Bolzano Province and the Slovenes around Trieste. There are also small communities of Albanian, Greek, Ladino, and French origin. Immigration has increased in recent years, however, while the Italian population is declining overall due to low birth rates. Although Roman Catholicism is the majority religion--85% of native-born citizens are nominally Catholic--all religious faiths are provided equal freedom before the law by the constitution.

Greeks settled in the southern tip of the Italian Peninsula in the eighth and seventh centuries B.C.; Etruscans, Romans, and others inhabited the central and northern mainland. The peninsula subsequently was unified under the Roman Republic. The neighboring islands came under Roman control by the third century B.C.; by the first century A.D., the Roman Empire effectively dominated the Mediterranean world. After the collapse of the Roman Empire in the West in the fifth century A.D., the peninsula and islands were subjected to a series of invasions, and political unity was lost. Italy became an oft-changing succession of small states, principalities, and kingdoms, which fought among themselves and were subject to ambitions of foreign powers. Popes of Rome ruled central Italy; rivalries between the popes and the Holy

Roman Emperors, who claimed Italy as their domain, often made the peninsula a battleground. The commercial prosperity of northern and central Italian cities, beginning in the 11th century, combined with the influence of the Renaissance, mitigated somewhat the effects of these medieval political rivalries. Although Italy declined after the 16th century, the Renaissance had strengthened the idea of a single Italian nationality. By the early 19th century, a nationalist movement developed and led to the reunification of Italy--except for Rome--in the 1860s. In 1861, Victor Emmanuel II of the House of Savoy was proclaimed King of Italy. Rome was incorporated in 1870. From 1870 until 1922, Italy was a constitutional monarchy with a parliament elected under limited suffrage.

20th-Century History
During World War I, Italy renounced its standing alliance with Germany and Austria-Hungary and, in 1915, entered the war on the side of the Allies. Under the postwar settlement, Italy received some former Austrian territory along the northeast frontier. In 1922, Benito Mussolini came to power and, over the next few years, eliminated political parties, curtailed personal liberties, and installed a fascist dictatorship termed the Corporate State. The king, with little or no effective power, remained titular head of state.

Italy allied with Germany and declared war on the United Kingdom and France in 1940. In 1941, Italy--with the other Axis powers, Germany and Japan--declared war on the United States and the Soviet Union. Following the Allied invasion of Sicily in 1943, the King dismissed Mussolini and appointed Marshal Pietro Badoglio as Premier. The Badoglio government declared war on Germany, which quickly occupied most of the country and freed Mussolini, who led a brief-lived regime in the north. An anti-fascist popular resistance movement grew during the last 2 years of the war, harassing German forces before they were driven out in April 1945. A 1946 plebiscite ended the monarchy, and a constituent assembly was elected to draw up plans for the republic.

Under the 1947 peace treaty, minor adjustments were made in Italy's frontier with France, the eastern border area was transferred to Yugoslavia, and the area around the city of Trieste was designated a free territory. In 1954, the free territory, which had remained under the administration of U.S.-U.K. forces (Zone A, including the city of Trieste) and Yugoslav forces (Zone B), was divided between Italy and Yugoslavia, principally along the zonal boundary. This arrangement was made permanent by the Italian-Yugoslav Treaty of Osimo, ratified in 1977 (currently being discussed by Italy, Slovenia, and Croatia). Under the 1947 peace treaty, Italy relinquished its overseas territories and certain Mediterranean islands.

The Roman Catholic Church's status in Italy has been determined, since its temporal powers ended in 1870, by a series of accords with the Italian Government. Under the Lateran Pacts of 1929, which were confirmed by the present constitution, Vatican City is recognized by Italy as an independent, sovereign entity. While preserving that recognition, in 1984, Italy and the Vatican updated several provisions of the 1929 accords. Included was the end of Roman Catholicism as Italy's formal state religion.

Italy's Cultural Contributions
Europe's Renaissance period began in Italy during the 14th and 15th centuries. Literary achievements--such as the poetry of Petrarch, Tasso, and Ariosto and the prose of Boccaccio, Machiavelli, and Castiglione--exerted a tremendous and lasting influence on the subsequent development of Western civilization, as did the painting, sculpture, and architecture contributed by giants such as da Vinci, Raphael, Botticelli, Fra Angelico, and Michelangelo.

The musical influence of Italian composers Monteverdi, Palestrina, and Vivaldi proved epochal; in the 19th century, Italian romantic opera flourished under composers Gioacchino Rossini, Giuseppe Verdi, and Giacomo Puccini. Contemporary Italian artists, writers, filmmakers, architects, composers, and designers contribute significantly to Western culture.

GOVERNMENT
Italy has been a democratic republic since June 2, 1946, when the monarchy was abolished by popular referendum. The constitution was promulgated on January 1, 1948.

The Italian state is centralized. The prefect of each of the provinces is appointed by and answerable to the central government. In addition to the provinces, the constitution provides for 20 regions with limited governing powers. Five regions--Sardinia, Sicily, Trentino-Alto Adige, Valle d'Aosta, and Friuli-Venezia Giulia--function with special autonomy statutes. The other 15 regions were established in 1970 and vote for regional "councils." The establishment of regional governments throughout Italy has brought some decentralization to the national governmental machinery, and recent governments have devolved further powers to the regions. Many regional governments, particularly in the north of Italy, are seeking additional powers.

The 1948 constitution established a bicameral parliament (Chamber of Deputies and Senate), a separate judiciary, and an executive branch composed of a Council of Ministers (cabinet), headed by the president of the council (prime minister). The president of the republic is elected for 7 years by the parliament sitting jointly with a small number of regional delegates. The president nominates the prime minister, who chooses the other ministers. The Council of Ministers--in practice composed mostly of members of parliament--must retain the confidence of both houses.

The houses of parliament are popularly and directly elected by a proportional representation system. Under 2005 legislation, the Chamber of Deputies has 630 members (12 of whom are elected by Italians abroad). In addition to 315 elected members (six of whom are elected by Italians abroad), the Senate includes former presidents and several other persons appointed for life according to special constitutional provisions. Both houses are elected for a maximum of 5 years, but either may be dissolved before the expiration of its normal term. Legislative bills may originate in either house and must be passed by a majority in both.

The Italian judicial system is based on Roman law modified by the Napoleonic code and subsequent statutes. There is only partial judicial review of legislation in the American sense. A constitutional court, which passes on the constitutionality of laws, is a post-World War II innovation. Its powers and the volume and frequency of its decisions are not as extensive as those of the U.S. Supreme Court.

Principal Government Officials
President--Giorgio Napolitano
Prime Minister--Silvio Berlusconi
Foreign Minister--Franco Frattini
Minister of Defense--Ignazio La Russa
Minister of Finance--Giulio Tremonti
Minister of Justice--Angelino Alfano
Minister of the Interior--Roberto Maroni
Ambassador to the United States--Giulio Terzi di Sant'Agata

Italy maintains an embassy in the United States at 3000 Whitehaven Street, NW, Washington, DC 20008 (tel. 202-612-4400).

POLITICAL CONDITIONS
Until recently, there had been frequent government turnovers (more than 60 and counting) since 1945. The dominance of the Christian Democratic (DC) party during much of the postwar period lent continuity and comparative stability to Italy's political situation.

From 1992 to 1997, Italy faced significant challenges as voters--disenchanted with past political paralysis, massive government debt, extensive corruption, and organized crime's considerable influence--demanded political, economic, and ethical reforms. In 1993 referendums, voters approved substantial changes, including moving from a proportional to a largely majoritarian electoral system and the abolishment of some ministries. However in 2005, parliament passed a new electoral law based on full proportional assignment of seats.

Major political parties, beset by scandal and loss of voter confidence, underwent far-reaching changes. New political forces and new alignments of power emerged in March 1994 national elections. The election saw a major turnover in the new parliament, with 452 out of 630 deputies and 213 out of 315 senators elected for the first time. The 1994 elections also swept media magnate Silvio Berlusconi--and his Freedom Pole coalition--into office as Prime Minister. Berlusconi, however, was forced to step down in January 1995 when one member of his coalition withdrew support. The Berlusconi government was succeeded by a technical government headed by Prime Minister Lamberto Dini, which fell in early 1996. New elections in 1996 brought a center-left coalition to government for the first time after World War II.

A series of center-left coalitions dominated Italy's political landscape between 1996 and 2001. In April 1996, national elections led to the victory of a center-left coalition (the Olive Tree) under the leadership of Romano Prodi. Prodi's government became the second-longest to stay in power before he narrowly lost a vote of confidence (by three votes) in October 1998. A new government was formed by Democratic Party of the Left leader and former-communist Massimo D'Alema. In April 2000, following a poor showing by his coalition in regional elections, D'Alema resigned. The succeeding center-left government, including most of the same parties, was headed by Giuliano Amato, who had previously served as Prime Minister in 1992-93.

National elections, held on May 13, 2001, returned Berlusconi to power at the head of the five-party center-right Freedom House coalition, comprising the prime minister's own party, Forza Italia, the National Alliance, the Northern League, the Christian Democratic Center, and the United Christian Democrats. This Berlusconi government served its entire term.

In national elections held April 9-10, 2006, Romano Prodi's center-left Union coalition won a narrow victory over Berlusconi's Freedom House coalition. The Union coalition included the Democratic Party (born of the November 2007 fusion of the Democrats of the Left and the Daisy Party), UDEUR (Union of Democrats for Europe), Rose in the Fist (made up by Italian Social Democrats and Italian Radical Party), Communist Renewal, the Italian Communist Party, Italy of Values, and the Greens.

In May 2006, the parliament elected Giorgio Napolitano as the Republic's President. President Napolitano formerly served as a lifetime senator, Minister of the Interior, and a member of the European Parliament as a member of center-left parties. President Napolitano's term ends in May 2013. The Senate, lower house, and regional representatives will vote to elect his successor.

In January 2008, the Prodi government fell when small coalition partner UDEUR withdrew support. In February, the President dissolved parliament and Silvio Berlusconi returned to power after defeating former Rome Mayor Walter Veltroni by a comfortable margin in elections on April 13-14, 2008. Berlusconi's winning coalition was composed of the People of Liberty (a union of Forza Italia and National Alliance), the Northern League, and the Movement for Autonomy. Berlusconi was sworn in as Prime Minister on May 8. Veltroni resigned as leader of the opposition in February 2009. His deputy, Dario Franceschini, was elected new Democratic Party (PD) leader until party primary elections held in October 2009, when Pierluigi Bersani was elected PD national secretary. In April 2010, Gianfranco Fini, cofounder of the People of Liberty, and a number of adherents broke from it and established a new opposition party called Future and Liberty, weakening Berlusconi’s coalition, which continued nevertheless to govern.

Political Parties
Italy's dramatic self-renewal transformed the political landscape between 1992 and 1997. Scandal investigations touched thousands of politicians, administrators, and businessmen; the shift from a proportional to majoritarian voting system also altered the political landscape.

Party changes were sweeping. The Christian Democratic Party dissolved; the Italian People's Party and the Christian Democratic Center emerged. Other major parties, such as the Socialists, saw support plummet. A new populist and free-market oriented movement, Forza Italia, gained wide support among moderate voters. The National Alliance broke from the neofascist Italian Social Movement. A trend toward two large coalitions--one on the center-left and the other on the center-right--emerged from the April 1995 regional elections. For the 1996 national elections, the center-left parties created the Olive Tree coalition while the center right united again under the Freedom Pole. The May 2001 elections ushered into power a refashioned center-right coalition dominated by Berlusconi's party, Forza Italia. The April 2006 elections returned the center-left to power under the eight-party Union coalition, a successor to the Olive Tree.

In October 2007, the Democrats of the Left and the Daisy parties officially merged to form the Democratic Party. Veltroni was chosen as party leader and was the center-left's candidate in the April 2008 elections. Silvio Berlusconi launched an alliance between his Forza Italia party and Gianfranco Fini's National Alliance. The parties ran together under the People of Liberty symbol in April 2008. The election greatly simplified parliament, dramatically reducing the numbers of parties, and for the first time since World War II, leaving communist parties out of parliament. People of Liberty (37.4%) won the largest share of the vote and took power in coalition with a strengthened Northern League (8.3%) and the tiny Movement for Autonomy (1.1%). The Democratic Party scored 33.2% and ran in alliance with Italy of Values (4.4%), while the Union of the Center (5.6%) ran alone.

In March 2009, Forza Italia and National Alliance changed the People of Liberty identification from an alliance to a party. The mass center-right party, led by Berlusconi, is Italy's largest party and one of the largest in Europe.

ECONOMY
The Italian economy has changed dramatically since the end of World War II. From an agriculturally based economy, it has developed into an industrial state ranked as the world's seventh-largest market economy. Italy belongs to the Group of Eight (G-8) industrialized nations; it is a member of the European Union and the Organization for Economic Cooperation and Development (OECD).

Italy has few natural resources. With much land unsuited for farming, Italy is a net food importer. There are no substantial deposits of iron, coal, or oil. Proven natural gas reserves, mainly in the Po Valley and offshore in the Adriatic, constitute the country's most important mineral resource. Most raw materials needed for manufacturing and more than 80% of the country's energy sources are imported. Italy's economic strength is in the processing and the manufacturing of goods, primarily in small and medium-sized family-owned firms. Its major industries are precision machinery, motor vehicles, chemicals, pharmaceuticals, electric goods, and fashion and clothing.

Italy continues to grapple with budget deficits and high public debt--4.6% and 119% of GDP for 2010, respectively. Italy joined the European Monetary Union (EMU) in 1998 by signing the Stability and Growth Pact, and as a condition of this Euro zone membership, Italy must keep its budget deficit beneath a 3% ceiling. The Italian Government has found it difficult to bring the budget deficit down to a level that would allow a rapid decrease of the debt. The worsening economic situation undermined this aim, and the deficit grew well above the 3% ceiling in 2009 and 2010, to 5.4% and 4.5% respectively. The government plans to bring the deficit down to 3.9% in 2011 and below 3% in 2012. Modest GDP growth is likely to jeopardize this effort.

Italy's economic growth averaged only 0.8% in the period 2001-2008. GDP contracted as the Euro zone and world economies slowed, decreasing 1.3% in 2008 and 5.2% in 2009 largely due to the global economic crisis and its impact on exports and domestic demand. GDP recovered only part of the ground lost, growing 1.3% in 2010. In 2011 Italy’s GDP is expected to grow below the EMU countries' average.

Italy's closest trade ties are with the other countries of the European Union, with whom it conducts about 58.1% of its total trade (2009 data). Italy's largest European Union trade partners, in order of market share, are Germany (12.7%), France (11.6%), Spain (5.7%), and the United Kingdom (5.1%). Italy continues to grapple with the effects of globalization, where certain countries (notably China) have eroded the Italian lower-end industrial product sector.

The Italian economy is also affected by a large underground economy--worth some 27% of Italy's GDP. This production is not subject, of course, to taxation and thus remains a source of lost revenue to the local and central government.

U.S.-Italy Economic Relations
The United States and Italy cooperate closely on major economic issues, including within the G-8. With a large population and a high per capita income, Italy was the United States' 16th-largest trading partner in 2010, with total bilateral trade of $42.7 billion comprised of exports to Italy totaling $14.2 billion and imports from Italy worth $28.5 billion. The U.S.'s $14.3 billion deficit with Italy in 2010 was largely in line with the $14.2 billion deficit registered in 2009. Machinery and aircraft are becoming important U.S. exports to Italy. U.S. foreign direct investment in Italy at the end of 2009 exceeded $28.7 billion.

Labor
Unemployment is a regional issue in Italy--low in the north, high in the south. Italy's unemployment rate, 8.5% in 2010, has crept up as a decade of low growth and the slowing world economy have taken their toll. The U.S. Embassy and various economists expect the unemployment rate to remain high in 2011 and 2012. Traditional regional labor market disparities remain unchanged, with the southern third of the country posting a significantly higher unemployment rate compared to northern and central Italy. The overall national rate is at its lowest level since 1992. Chronic problems of inadequate infrastructure, corruption, and organized crime act as disincentives to investment and job creation in the south. A significant underground economy absorbs substantial numbers of people, but they work for low wages and without standard social benefits and protections. Women and youth have significantly higher rates of unemployment than do men.

Unions claim to represent 40% of the work force. Most Italian unions are grouped in four major confederations: the General Italian Confederation of Labor (CGIL), the Italian Confederation of Workers' Unions (CISL), the Italian Union of Labor (UIL), and the General Union of Labor (UGL), which together claim 35% of the work force. These confederations formerly were associated with important political parties or currents, but they have evolved into fully autonomous, professional bodies. The CGIL, CISL, and UIL are affiliated with the International Confederation of Free Trade Unions (ICFTU) and customarily coordinate their positions before confronting management or lobbying the government. The confederations have had an important consultative role on national social and economic issues.

Agriculture
Italy's agriculture is typical of the division between the agricultures of the northern and southern countries of the European Union. The northern part of Italy produces primarily grains, sugar beets, soybeans, meat, and dairy products, while the south specializes in fruits, vegetables, olive oil, wine, and durum wheat. Even though much of its mountainous terrain is unsuitable for farming, Italy has a large work force (1.4 million) employed in farming. Most farms are small, with the average size being only seven hectares.

For further economic and commercial information, please refer to the Country Commercial Guide for Italy.

FOREIGN RELATIONS
Italy was a founding member of the European Community--now the European Union (EU). Italy was admitted to the United Nations in 1955 and is a member and strong supporter of the North Atlantic Treaty Organization (NATO), the Organization for Economic Cooperation and Development (OECD), the General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO), the Organization for Security and Cooperation in Europe (OSCE), and the Council of Europe. It chaired the CSCE (the forerunner of the OSCE) in 1994; the EU from July to December 1990, January to June 1996, and July to December 2003; and the G-8 in 2001 and in 2009. Italy served a 2-year term on the UN Security Council in 2007-2008.

Italy firmly supports the United Nations and its international security activities. Italy led the UN mission in Lebanon (UNIFIL) and has actively participated in and deployed troops in support of UN peacekeeping missions in Somalia, Mozambique, and Timor-Leste. It has provided critical support for NATO and EU operations in Afghanistan, Bosnia, Kosovo, Albania, Georgia, and Chad. Italy, under NATO's ISAF, maintains a Provincial Reconstruction Team in the western Afghanistan province of Herat, commands RC-West, and maintains a Carabinieri police training center. Italy supports reconstruction and development assistance to the Iraqi people through humanitarian workers and other officials, particularly in Dhi Qar Province, and is a leading contributor to the NATO Training Mission-Iraq, with approximately 70 military personnel and Carabinieri police trainers. Currently almost 8,000 Italian troops are deployed, including approximately 1,100 in Kosovo, almost 1,800 in Lebanon as part of UNIFIL, and approximately 4,000 in Afghanistan.

The Italian Government seeks to obtain consensus with other European countries on various defense and security issues within the EU as well as NATO. European integration and the development of common defense and security policies will continue to be of primary interest to Italy.

U.S.-ITALY RELATIONS
The United States enjoys warm and friendly relations with Italy. Italy is a leading partner in counterterrorism efforts. The two are NATO allies and cooperate in the United Nations, in various regional organizations, and bilaterally for peace, prosperity, and security. Italy has worked closely with the United States and others on such issues as NATO and UN operations as well as on assistance to Russia and the New Independent States; Lebanon; the Middle East peace process; multilateral talks; Somalia and Mozambique peacekeeping; and combating drug trafficking, trafficking in women and children, and terrorism.

Under longstanding bilateral agreements flowing from NATO membership, Italy hosts important U.S. military forces at Vicenza and Livorno (army); Aviano (air force); and Sigonella, Gaeta, and Naples--home port for the U.S. Navy Sixth Fleet. The United States has about 11,500 military personnel stationed in Italy. Italy hosts the NATO Defense College in Rome.

Italy remains a strong and active transatlantic partner which, along with the United States, has sought to foster democratic ideals and international cooperation in areas of strife and civil conflict. Toward this end, the Italian Government has cooperated with the United States in the formulation of defense, security, and peacekeeping policies.

Principal U.S. Officials
Ambassador--David Thorne
Deputy Chief of Mission--Douglas Hengel
Economic Affairs--George White
Political Affairs--Liam Wasley
Consular Affairs--Philip Egger
Public Affairs--Benjamin Ziff
Commercial Affairs--Thomas Moore
Regional Security Affairs--James Bacigalupo
Agricultural Section--James Dever
Defense Attache--CAPT Clifford Olsen

Consular Posts
Consul General, Florence--Mary Ellen Countryman
Consul General, Milan--Carol Perez
Consul General, Naples--Donald Moore

The U.S. Embassy in Italy is located at Via Veneto 119, Rome (tel. (39)(06) 46741.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Dominica

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May 16, 2011Bureau of Western Hemisphere Affairs

Background Note: Dominica



Official Name: Commonwealth of Dominica



PROFILE

Geography
Area: 754 sq. km. (290 sq. mi.).
Cities: Capital--Roseau (population 14,500).
Terrain: Mountainous volcanic island with rainforest cover.
Climate: Tropical.

People
Nationality: Noun and adjective--Dominican (Dom-i-NEE-can).
Population (2008): 72,000.
Annual population growth rate (2005-2010): -3%. (Negative population growth is due to external migration.)
Ethnic groups: Mainly of African descent, mixed Black and European, Syrian and some Carib Amerindians.
Religions: Roman Catholic, Protestant (Methodist, Pentecostal, Seventh-Day Adventist, and Baptist), Islam, Baha'i, Rastafarianism, Anglican, Jehovah's Witnesses, Nazarene, Church of Christ, and Brethren Christian Churches.
Languages: English (official); a French-based Creole is widely spoken.
Education (2005): Adult literacy--94%.
Health (2006): Infant mortality rate--13/1,000. Life expectancy--men 72 years; women 77.9 years. Its number of centenarians per capita is among the highest in the world.
Work force (2005): 24,370.
Unemployment (2005): 13.1%.

Government
Type: Parliamentary democracy; republic within the Commonwealth.
Independence: November 3, 1978.
Constitution: November 1978.
Branches: Executive--president (head of state), prime minister (head of government), cabinet. Legislative--unicameral House of Assembly. Judicial--magistrate and jury courts, Eastern Caribbean Supreme Court (High Court and Court of Appeals), Privy Council.
Subdivisions: 10 parishes.
Political parties: Dominica Labour Party (incumbent), United Workers Party.
Suffrage: Universal at 18.

Economy
GDP (2010): $765.4 million.
GDP growth rate (2010): 1.4%.
GDP growth rate (1998-2008): 0.8%
Per capita GDP (2010): $10,500.
Inflation of consumer prices (2008): 6.3%.
Natural resources: timber, water (hydropower), copper.
Agriculture (10% of GDP in 2005): Products--bananas, citrus, coconuts, cocoa, herbal oils and extracts.
Manufacturing (3% of GDP in 2005): Types--agricultural processing, soap and other coconut-based products, apparel.
Trade (2005): Exports--$39.0 million (merchandise) and $82.0 million (commercial services). Major markets (2009)--Japan (28.62%); U.S. (19.81%); Antigua (7.7%); Guyana (6.52%); Jamaica (5.4%); Trinidad and Tobago (4.2%). Imports--$165 million (merchandise) and $49 million (commercial services). Major suppliers (2009)--Japan (31.29%); U.S. (19.73%); Trinidad and Tobago (11.8%); China (11.58%).

PEOPLE
Almost all Dominicans are descendants of enslaved Africans brought in by colonial planters in the 18th century. Dominica is the only island in the eastern Caribbean to retain some of its pre-Columbian population--the Carib Indians--about 3,000 of whom live on the island's east coast. The population growth rate is very low, due primarily to emigration to more prosperous Caribbean Islands, the United Kingdom, the United States, and Canada.

English is the official language; however, because of historic French domination, the most widely spoken dialect is a French-based Creole. Nearly 80% of the population is Catholic. In recent years, a number of Protestant churches have been established.

HISTORY
The island's indigenous Arawak people were expelled or exterminated by Caribs in the 14th century. Columbus landed there in November 1493. Spanish ships frequently landed on Dominica during the 16th century, but fierce resistance by the Caribs discouraged Spain's efforts at settlement.

In 1635, France claimed Dominica. Shortly thereafter, French missionaries became the first European inhabitants of the island. Carib incursions continued, though, and in 1660, the French and British agreed that both Dominica and St. Vincent should be abandoned. Dominica was officially neutral for the next century, but the attraction of its resources remained; rival expeditions of British and French foresters were harvesting timber by the start of the 18th century.

Largely due to Dominica's position between Martinique and Guadeloupe, France eventually became predominant, and a French settlement was established and grew. As part of the 1763 Treaty of Paris that ended the Seven Years' War, the island became a British possession. In 1778, during the American Revolutionary War, the French mounted a successful invasion with the active cooperation of the population. The 1783 Treaty of Paris, which ended the war, returned the island to Britain. French invasions in 1795 and 1805 ended in failure.

In 1763, the British established a legislative assembly, representing only the white population. In 1831, reflecting a liberalization of official British racial attitudes, the Brown Privilege Bill conferred political and social rights on free nonwhites. Three Blacks were elected to the legislative assembly the following year. Following the abolition of slavery, in 1838 Dominica became the first and only British Caribbean colony to have a Black-controlled legislature in the 19th century. Most Black legislators were smallholders or merchants who held economic and social views diametrically opposed to the interests of the small, wealthy English planter class. Reacting to a perceived threat, the planters lobbied for more direct British rule.

In 1865, after much agitation and tension, the colonial office replaced the elective assembly with one comprised of one-half elected members and one-half appointed. Planters allied with colonial administrators outmaneuvered the elected legislators on numerous occasions. In 1871, Dominica became part of the Leeward Island Federation. The power of the Black population progressively eroded. Crown Colony government was re-established in 1896. All political rights for the vast majority of the population were effectively curtailed. Development aid, offered as compensation for disenfranchisement, proved to have a negligible effect.

Following World War I, an upsurge of political consciousness throughout the Caribbean led to the formation of the Representative Government Association. Marshaling public frustration with the lack of a voice in the governing of Dominica, this group won one-third of the popularly elected seats of the legislative assembly in 1924 and one-half in 1936. Shortly thereafter, Dominica was transferred from the Leeward Island Administration and was governed as part of the Windwards until 1958, when it joined the short-lived West Indies Federation.

After the federation dissolved, Dominica became an associated state of the United Kingdom in 1967 and formally took responsibility for its internal affairs. On November 3, 1978, the Commonwealth of Dominica was granted independence by the United Kingdom.

Independence did little to solve problems stemming from centuries of economic underdevelopment, and in mid-1979, political discontent led to the formation of an interim government. It was replaced after the 1980 elections by a government led by the Dominica Freedom Party under Prime Minister Eugenia Charles, the Caribbean's first female prime minister. Chronic economic problems were compounded by the severe impact of hurricanes in 1979 and in 1980. By the end of the 1980s, the economy recovered, but weakened again in the 1990s due to a decrease in banana prices. In the 2000s, the economy was hit by a spate of disasters, including the removal of the European preferential trade for bananas, the impact of Hurricane Dean, and the global financial meltdown. Dominica has managed quite well during the current global recession as a smaller percentage of its economy is based on tourism and foreign investment.

In the January 2000 elections, the Edison James United Workers Party (UWP) was defeated by the Dominican Labour Party (DLP), led by Roosevelt P. "Rosie" Douglas. Douglas died after only a few months in office and was replaced by Pierre Charles, who died in office in January 2004. Roosevelt Skerrit, also of the DLP, replaced Charles as Prime Minister. Under Prime Minister Skerrit's leadership, the DLP won elections in May 2005 and in December 2009. In 2009, the DLP won 18 of the 21 constituencies, with the UWP collecting 3 seats. Currently the opposition has decided to boycott parliament over allegations of campaign improprieties. Due to the absence in parliament of 2 UWP members, the government held by-elections on July 9, 2010 with both seats won by the UWP.

GOVERNMENT AND POLITICAL CONDITIONS
Dominica has a Westminster-style parliamentary government, and there are two major political parties--the Dominica Labour Party (the majority party), and the Dominica United Workers Party. The Dominica Freedom Party has lost its party base and is no longer a factor in elections. A president and prime minister make up the executive branch. Nominated by the prime minister in consultation with the leader of the opposition party, the president is elected for a 5-year term by the parliament. The president appoints as prime minister the leader of the majority party in the parliament and also appoints, on the prime minister's recommendation, members of the parliament from the ruling party as cabinet ministers. The prime minister and cabinet are responsible to the parliament and can be removed on a no-confidence vote.

The unicameral parliament, called the House of Assembly, is composed of 21 regional representatives and nine senators. The regional representatives are elected by universal suffrage and, in turn, decide whether senators are to be elected or appointed. If appointed, five are chosen by the president with the advice of the prime minister and four with the advice of the opposition leader. If elected, it is by vote of the regional representatives. Elections for representatives and senators must be held no later than 5 years after the first meeting of parliament, although the prime minister can call elections any time. The last election was held in December 2009.

Dominica's legal system is based on English common law. There are three magistrate's courts, with appeals made to the Eastern Caribbean Court of Appeal and, ultimately, to the Privy Council in London.

Councils elected by universal suffrage govern most towns. Supported largely by property taxation, the councils are responsible for the regulation of markets and sanitation and the maintenance of secondary roads and other municipal amenities. The island is also divided into 10 parishes, whose governance is unrelated to the town governments.

Principal Government Officials
President--Nicholas Liverpool
Prime Minister and Minister for Finance, Foreign Affairs and Information Technology--Roosevelt Skerrit
Minister for National Security, Labour and Immigration--Charles Savarin
Ambassador to the United States and Organization of American State--Hubert J. Charles
Ambassador to the United Nations--Vince Henderson

The Dominican Embassy in the United States is located at 3216 New Mexico Ave., NW, Washington, DC 20016 (tel. 202-364-6781). Dominica also has a consulate general co-located with its UN mission in New York at Suite 900, 820 Second Avenue, New York, NY 10017 (tel: 212-599-8478).

ECONOMY
Many consider Dominica's economic situation the most challenging of all the Eastern Caribbean states. While the economy has grown faster in more recent years, growth over the last decade was still under 1%. The country nearly had a financial crisis in 2003 and 2004. Growth in 2006 was attributed to gains in tourism, construction, offshore and other services, and some sub-sectors of the banana industry. The International Monetary Fund (IMF) recently praised the Government of Dominica for its successful macroeconomic reforms. The IMF also pointed out remaining challenges, including further reductions in public debt, increased financial sector regulation, and market diversification.

Bananas and other agriculture dominate Dominica's economy, and nearly one-third of the labor force works in agriculture. This sector, however, is highly vulnerable to weather conditions and to external events affecting commodity prices. In 2007, Hurricane Dean caused significant damage to the agricultural sector as well as the country's infrastructure, especially roads. In response to reduced European Union (EU) banana trade preferences, the government has diversified the agricultural sector by introducing coffee, patchouli, aloe vera, cut flowers, and exotic fruits such as mangoes, guavas, and papayas. Dominica has had some success in increasing its manufactured exports, primarily soap.

Dominica is mostly volcanic and has few beaches; therefore, tourism has developed more slowly than on neighboring islands. Nevertheless, Dominica's high, rugged mountains, rainforests, freshwater lakes, hot springs, waterfalls, and diving spots make it an attractive eco-tourism destination. Cruise ship stopovers have increased following the development of modern docking and waterfront facilities in the capital.

Dominica's currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7=U.S. $1.

Dominica is a beneficiary of the U.S. Caribbean Basin Initiative that grants duty-free entry into the United States for many goods. Dominica also belongs to the predominantly English-speaking Caribbean Community and Common Market (CARICOM), the CARICOM Single Market and Economy (CSME), and the Organization of Eastern Caribbean States (OECS).

FOREIGN RELATIONS
Like its Eastern Caribbean neighbors, the main priority of Dominica's foreign relations is economic development. The country maintains missions in Washington, New York, London, and Brussels and is represented jointly with other Organization of Eastern Caribbean States (OECS) members in Canada. Dominica also is a member of the Caribbean Development Bank (CDB) and the British Commonwealth. It became a member of the United Nations and the International Monetary Fund (IMF) in 1978 and of the World Bank and Organization of American States (OAS) in 1979. In March 2004, Dominica established diplomatic relations with the People's Republic of China. In January 2008, Dominica joined the Bolivarian Alliance for the Americas (ALBA).

U.S.-DOMINICAN RELATIONS
The United States and Dominica have friendly bilateral relations. The United States supports the Dominican Government's efforts to expand its economic base and to provide a higher standard of living for its citizens. U.S. assistance is primarily channeled through multilateral agencies such as the World Bank and the Caribbean Development Bank (CDB), as well as through the U.S. Agency for International Development (USAID) office in Bridgetown, Barbados. The Peace Corps also provides technical assistance to Dominica, and has volunteers on the island working primarily in education, youth development, and health.

In addition, the United States and Dominica work together in the battle against illegal drugs. Dominica cooperates with U.S. agencies and participates in counternarcotics programs in an effort to curb narco-trafficking and marijuana cultivation. In 1995, the Dominican Government signed a maritime law enforcement agreement with the United States to strengthen counternarcotics coordination, and in 1996, the government signed mutual legal assistance and extradition treaties to enhance joint efforts in combating international crime.

More Americans visit Dominica than any other national group. In 2008, tourist visitors totaled around 460,000, mainly from the United States, the French West Indies, the United Kingdom, and CARICOM. The two largest private employers in Dominica are U.S. companies, and a large number of Americans attend Ross University, a U.S. medical school with a campus in Portsmouth.

The United States maintains no official presence in Dominica. The Ambassador and Embassy officers are resident in Barbados but travel frequently to Dominica.

The U.S. Embassy in Barbados is located in the Wildey Business Park, Wildey, St. Michael (tel: 246-436-4950; fax: 246-429-5246).

Principal U.S. Embassy Officials
Ambassador--vacant
Charge d’Affaires--D. Brent Hardt
Political/Economic Chief--Brian Greaney
Commercial Affairs--Greg Floyd
Consul General--Eugene Sweeney
Public Affairs Officer--Rebecca Ross
Peace Corps Director--Kevin Carley (resident in St. Lucia)

Other Contact Information
International Trade Administration
U.S. Department of Commerce
1401 Constitution Ave NW
Washington, DC 20230
Tel: 1-800-USA-TRADE
http://trade.gov/

Caribbean/Latin American Action
1818 N Street, NW, Suite 310
Washington, DC 20036
Tel: (202) 466-7464
Fax: (202) 822-0075
 

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Antigua and Barbuda

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May 16, 2011Bureau of Western Hemisphere Affairs

Background Note: Antigua and Barbuda



Official Name: Antigua and Barbuda



PROFILE

Geography
Area: Antigua--281 sq. km. (108 sq. mi.); Barbuda--161 sq. km. (62 sq. mi.).
Cities: Capital--St. John's (pop. 30,000).
Terrain: Generally low-lying, with highest elevation 405 m. (1,330 ft.).
Climate: Tropical maritime.

People
Nationality: Noun and adjective--Antiguan(s), Barbudan(s).
Population (July 2011 est.): 87,884.
Annual population growth rate (2011 est.): 1.3%.
Ethnic groups: Almost entirely of African origin; some of British, Portuguese, and Levantine Arab origin.
Religions: Principally Anglican, with evangelical Protestant and Roman Catholic minorities.
Language: English.
Education (2005): Adult literacy--85.8%.
Health (2011): Infant mortality rate--14.63/1,000. Life expectancy--men 73 years; women 77 years.
Work force (2005): 30,000 (commerce and services, agriculture, other industry).
Unemployment (2011 est.): 11%.

Government
Type: Parliamentary democracy; independent sovereign state within the Commonwealth.
Constitution: 1981.
Independence: November 1, 1981.
Branches: Executive--governor general (representing Queen Elizabeth II, head of state), prime minister (head of government), cabinet. Legislative--bicameral Parliament. Judicial--magistrate's courts, Eastern Caribbean Supreme Court (High Court and Court of Appeal), Privy Council in London.
Administrative subdivisions: Six parishes and two dependencies (Barbuda and Redonda).
Political parties: Antigua Labour Party (ALP), United Progressive Party (UPP, majority), Barbuda People's Movement (BPM).
Suffrage: Universal at 18.

Economy
GDP (2010 est.): $1.433 billion.
GDP growth rate (2010 est.): -4.1%.
Per capita GDP (2010): $16,500.
Inflation (2007): 1.5%.
Natural resources: Negligible.
Agriculture: Fish, cotton, livestock, vegetables, bananas, coconuts, cucumbers, mangoes, sugarcane, and pineapples.
Services: Tourism, construction, light manufacturing, banking, and other financial services.
Trade (2005): Exports--$58 million (merchandise) and $454 million (commercial services). Major markets--European Union (23.2%), United States (7.7%), Anguilla (7.0%), St. Kitts and Nevis (10.3%), Netherlands Antilles (23.4%). Imports--$497 million (merchandise) and $197 million (commercial services). Major suppliers--United States (48.9%), Netherlands Antilles (10.2%), European Union (11.6%), Trinidad and Tobago (10.9%), Canada (3.7%).
Official exchange rate: EC$2.70 = U.S. $1.

HISTORY
Antigua was first inhabited by the Siboney ("stone people"), whose settlements date at least to 2400 BC. The Arawaks--who originated in Venezuela and gradually migrated up the chain of islands now called the Lesser Antilles--succeeded the Siboney. The warlike Carib people drove the Arawaks from neighboring islands but apparently did not settle on either Antigua or Barbuda.

Christopher Columbus landed on the islands in 1493, naming the larger one "Santa Maria de la Antigua." The English colonized the islands in 1632. Sir Christopher Codrington established the first large sugar estate in Antigua in 1674, and leased Barbuda to raise provisions for his plantations. Barbuda's only town is named after him. Codrington and others brought slaves from Africa's west coast to work the plantations.

Antiguan slaves were emancipated in 1834, but remained economically dependent on the plantation owners. Economic opportunities for the new freedmen were limited by a lack of surplus farming land, no access to credit, and an economy built on agriculture rather than manufacturing. Poor labor conditions persisted until 1939, which saw the birth of the trade union movement in Antigua and Barbuda.

The Antigua Trades and Labour Union became the political vehicle for Vere Cornwall Bird, who was elected as the Labour Union's president in 1943. The Antigua Labour Party (ALP), formed by Bird and other trade unionists, first ran candidates in the 1946 elections and became the majority party in 1951, beginning a long history of electoral victories.

Bird and the ALP were voted out of office in the 1971 general elections that swept the progressive labor movement into power, but returned to office in 1976, winning renewed mandates in every subsequent election under Vere Bird's leadership until 1994 and also under the leadership of his son, Lester Bird, until 2004.

In March 2004 the ALP lost power in national elections that gave the United Progressive Party (UPP) 13 of the 17 seats in Parliament. In March 2009 elections, the ALP lost again to the Baldwin Spencer-led UPP, which won a slim majority, taking 9 of the 17 seats in Parliament; the ALP won 7 seats and the Barbuda People’s Movement (BPM) won 1 seat.

GOVERNMENT AND POLITICAL CONDITIONS
As head of state, Queen Elizabeth II is represented in Antigua and Barbuda by a governor general who acts on the advice of the prime minister and the cabinet. Antigua and Barbuda has a bicameral legislature: a 17-member Senate appointed by the governor general--mainly on the advice of the prime minister and the leader of the opposition--and a 17-member popularly elected House of Representatives. The prime minister is the leader of the majority party in the House and conducts affairs of state with the cabinet. The prime minister and the cabinet are responsible to the Parliament. Elections must be held at least every 5 years but may be called by the prime minister at any time.

National elections were last held on March 12, 2009. The opposition successfully challenged the election results in three constituencies and had the results nullified by the Antigua High Court. The ruling UPP subsequently appealed that decision and the Eastern Caribbean Court of Appeal overturned the High Court’s ruling in October 2010, returning three ministers to their parliamentary seats.

Constitutional safeguards include freedom of speech, press, worship, movement, and association. Antigua and Barbuda is a member of the eastern Caribbean court system. Jurisprudence is based on English common law.

Principal Government Officials
Chief of State--Queen Elizabeth II
Governor General--Louise Agnetha Lake-Tack
Prime Minister and Minister of Foreign Affairs--Winston Baldwin Spencer
Ambassador to the United States and the OAS--Deborah Mae Lovell
Ambassador to the United Nations--John Ashe

Antigua and Barbuda maintains an embassy in the United States at 3216 New Mexico Ave. NW, Washington, DC 20016 (tel. 202-362-5122).

ECONOMY
Antigua and Barbuda's service-based economy contracted by 4.1% in 2010, experiencing its third consecutive year of decline. The Antiguan economy experienced solid growth from 2003 to 2007, reaching over 12% in 2006. Growth was driven by a construction boom in hotels and housing associated with the Cricket World Cup, but it dropped off in 2008 with the end of the boom. In 2009, Antigua was severely hit by the global economic crisis, suffering from the collapse of its largest financial institution and a steep drop in tourism. The economic decline continued in 2010 as the country struggled with a large deficit.

To lessen its vulnerability to natural disasters and economic shocks, Antigua has sought to diversify its economy by encouraging growth in transportation, communications, Internet gambling, and financial services.

Antigua and Barbuda's currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7=U.S. $1.

Antigua and Barbuda is a beneficiary of the U.S. Caribbean Basin Initiative, which grants duty-free entry into the United States for many goods. In 2005, 7.7% of its total exports went to the United States, and 48.9% of its total imports came from the United States. Antigua and Barbuda also belongs to the predominantly English-speaking Caribbean Community and Common Market (CARICOM) and the CARICOM Single Market and Economy (CSME).

FOREIGN RELATIONS
Antigua and Barbuda maintains diplomatic relations with the United States, Canada, the United Kingdom, and the People's Republic of China, as well as with many Latin American, European, African, and neighboring Eastern Caribbean states. It is a member of the United Nations, the Commonwealth of Nations, the Organization of American States, the Organization of Eastern Caribbean States, and the Eastern Caribbean's Regional Security System (RSS). Unlike some of its neighbors in the Eastern Caribbean, Antigua and Barbuda has withheld recognition of Taiwan and has established relations with the People's Republic of China.

U.S.-ANTIGUA AND BARBUDA RELATIONS
The United States has maintained friendly relations with Antigua and Barbuda since its independence. The United States has supported the Government of Antigua and Barbuda's effort to expand its economic base and to improve its citizens' standard of living. However, concerns over the lack of adequate regulation of the financial services sector prompted the U.S. Government to issue a financial advisory for Antigua and Barbuda in 1999. The advisory was lifted in 2001, but the U.S. Government continues to monitor the Government of Antigua and Barbuda's regulation of financial services. The United States also has been active in supporting post-hurricane disaster assistance and rehabilitation through the U.S. Agency for International Development's (USAID) Office of Foreign Disaster Assistance and the Peace Corps. U.S. assistance is primarily channeled through multilateral agencies such as the World Bank and the Caribbean Development Bank (CDB), as well as through the USAID office in Bridgetown, Barbados. In addition, Antigua and Barbuda receives counternarcotics assistance and benefits from U.S. military exercise-related and humanitarian civic assistance construction projects.

Antigua and Barbuda is strategically situated in the Leeward Islands near maritime transport lanes of major importance to the United States. Antigua has long hosted a U.S. military presence. The United States Air Force operates a satellite tracking station under a lease agreement with the Government of Antigua and Barbuda.

Antigua and Barbuda's location close to the U.S. Virgin Islands and Puerto Rico makes it an attractive transshipment point for narcotics traffickers. To address these problems, the United States and Antigua and Barbuda have signed a series of counternarcotic and anticrime treaties and agreements, including a maritime law enforcement agreement (1995), subsequently amended to include overflight and order-to-land provisions (1996); a bilateral extradition treaty (1996); and a mutual legal assistance treaty (1996).

In 2005, Antigua and Barbuda had 239,804 stay-over visitors, with nearly 28% of Antigua and Barbuda's visitors coming from the United States. It is estimated that 4,500 Americans reside in the country.

The United States maintains no official presence in Antigua. The Ambassador and Embassy officers are resident in Barbados and travel to Antigua frequently. However, a U.S. consular agent resident in Antigua assists U.S. citizens in Antigua and Barbuda.

Principal U.S. Embassy Officials
Ambassador--vacant
Deputy Chief of Mission--D. Brent Hardt
Political/Economic Chief--Brian Greaney
Consul General--Eugene Sweeney
Commercial Affairs--Greg Floyd
Public Affairs Officer--Rebecca Ross
Peace Corps Director--Kevin Carley (resident in St. Lucia)

The U.S. Embassy in Barbados is located in the Wildey Business Park, Wildey, St. Michael. (tel: 246-227-4000; fax: 246-429-5246).

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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Background Notes : Saint Vincent and the Grenadines

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May 16, 2011Bureau of Western Hemisphere Affairs

Background Note: Saint Vincent and the Grenadines



Official Name: Saint Vincent and the Grenadines



PROFILE

Geography
Area: 340 sq. km. (130 sq. mi.); slightly less than twice the size of Washington, DC. The Grenadines include 32 islands, the largest of which are Bequia, Mustique, Canouan, and Union. Some of the smaller islands are privately owned.
Cities: Capital--Kingstown.
Terrain: Volcanic and mountainous, with the highest peak, Soufriere, rising to 1,219 meters (4,000 ft.).
Climate: Tropical.

People
Nationality: Noun and adjective--Vincentian.
Population (July 2009 est.): 104,574.
Annual population growth rate (2009 est.): -0.344%.
Ethnic groups: African descent (66%), mixed (19%), West Indian (6%), Carib Indian (2%), other (7%).
Religions: Anglican (47%), Methodist (28%), Roman Catholic (13%), other Protestant denominations, Seventh-day Adventist, and Hindu.
Language: English (official); some French Patois spoken.
Education (2004): Adult literacy--88.1%.
Health (2006): Infant mortality rate--17/1,000. Life expectancy--men 69 years; women 74 years.
Workforce (2006): 57,695.
Unemployment (2004): 12%.

Government
Type: Parliamentary democracy; independent sovereign state within the Commonwealth.
Independence: October 27, 1979.
Constitution: October 27, 1979.
Branches: Executive--governor general (representing Queen Elizabeth II, head of state), prime minister (head of government), cabinet. Legislative--unicameral legislature with 15-member elected House of Assembly and six-member appointed Senate. Judicial--district courts, Eastern Caribbean Supreme Court (High Court and Court of Appeals), final appeal to the Privy Council in London.
Subdivisions: Six parishes.
Political parties: Unity Labour Party (ULP, incumbent), New Democratic Party (NDP).
Suffrage: Universal at 18.

Economy
GDP (purchasing power parity, 2009 est.): $1.55 billion.
GDP real growth rate (2009 est.): -6.5%.
Per capita GDP (2009 est.): $18,100.
Inflation (consumer prices, 2007 est.): 6.1%.
Natural resources: Timber.
Agriculture: Mostly bananas.
Industry: Plastic products, food processing, cement, furniture, clothing, starch, and detergents.
Trade (2005): Exports--$40 million (merchandise) and $155 million (commercial services). Major markets--European Union (27.2%), Barbados (12.7%), Trinidad and Tobago (12.3%), Saint Lucia (10.9%), and the United States (9.2%). Imports--$240 million (merchandise) and $74 million (commercial services). Major suppliers--United States (33.3%), Trinidad and Tobago (23.6%), European Union (15.1%), Japan (4.2%), and Barbados (3.9%).
Official exchange rate: EC$2.70 = U.S. $1.

PEOPLE
Most Vincentians are the descendants of African slaves brought to the island to work on plantations. There also are a few white descendants of English colonists, as well as some East Indians, Carib Indians, and a sizable minority of mixed race. The country's official language is English, but a French patois may be heard on some of the Grenadine Islands.

HISTORY
Carib Indians aggressively prevented European settlement on St. Vincent until the 18th century. African slaves--whether shipwrecked or escaped from St. Lucia and Grenada and seeking refuge in St. Vincent--intermarried with the Caribs and became known as "black Caribs." Beginning in 1719, French settlers cultivated coffee, tobacco, indigo, cotton, and sugar on plantations worked by African slaves. In 1763, St. Vincent was ceded to Britain. Restored to French rule in 1779, St. Vincent was regained by the British under the Treaty of Versailles in 1783. Conflict between the British and the black Caribs continued until 1796, when General Abercrombie crushed a revolt fomented by the French radical Victor Hugues. More than 5,000 black Caribs were eventually deported to Roatan, an island off the coast of Honduras.

Slavery was abolished in 1834; the resulting labor shortages on the plantations attracted Portuguese immigrants in the 1840s and east Indians in the 1860s. Conditions remained harsh for both former slaves and immigrant agricultural workers, as depressed world sugar prices kept the economy stagnant until the turn of the century.

From 1763 until independence, St. Vincent passed through various stages of colonial status under the British. A representative assembly was authorized in 1776, Crown Colony government installed in 1877, a legislative council created in 1925, and universal adult suffrage granted in 1951.

During this period, the British made several unsuccessful attempts to affiliate St. Vincent with other Windward Islands in order to govern the region through a unified administration. The most notable was the West Indies Federation, which collapsed in 1962. St. Vincent was granted associate statehood status in 1969, giving it complete control over its internal affairs. Following a referendum in 1979, St. Vincent and the Grenadines became the last of the Windward Islands to gain independence.

Natural disasters have plagued the country throughout the 20th century. In 1902, the La Soufriere volcano erupted, killing 2,000 people. Much farmland was damaged, and the economy deteriorated. In April 1979, La Soufriere erupted again. Although no one was killed, thousands had to be evacuated, and there was extensive agricultural damage. In 1980 and 1987, hurricanes devastated banana and coconut plantations; 1998 and 1999 also saw very active hurricane seasons, with Hurricane Lenny in 1999 causing extensive damage to the west coast of the island.

GOVERNMENT
St. Vincent and the Grenadines is a parliamentary democracy within the Commonwealth of Nations. Queen Elizabeth II is head of state and is represented on the island by a governor general, an office with mostly ceremonial functions. Control of the government rests with the prime minister and the cabinet.

The parliament is a unicameral body, consisting of 15 elected members and six appointed senators. The governor general appoints senators, four on the advice of the prime minister and two on the advice of the leader of the opposition. The parliamentary term of office is 5 years, although the prime minister may call elections at any time.

As in other English-speaking Caribbean countries, the judiciary in St. Vincent is rooted in British common law. There are 11 courts in three magisterial districts. The Eastern Caribbean Supreme Court, comprising a High Court and a Court of Appeals, is known in St. Vincent as the St. Vincent and the Grenadines Supreme Court. The court of last resort is the judicial committee of Her Majesty's Privy Council in London.

There is no local government in St. Vincent, and all six parishes are administered by the central government.

Principal Government Officials
Head of State--Queen Elizabeth II
Governor General--Frederick Ballantyne
Prime Minister--Ralph E. Gonsalves
Minister of Foreign Affairs, Commerce, and Trade--Douglas Slater
Ambassador to the United States and the OAS--La Celia Prince
Permanent Representative to the UN--Camillo Gonsalves

St. Vincent and the Grenadines maintains an embassy at 3216 New Mexico Ave., NW, Washington, DC 20016 (tel. 202-364-6730). St. Vincent also has a consul resident in New York.

POLITICAL CONDITIONS
The People's Political Party (PPP), founded in 1952 by Ebenezer Joshua, was the first major political party in St. Vincent. The PPP had its roots in the labor movement and was in the forefront of national policy prior to independence, winning elections from 1957 through 1966. With the development of a more conservative black middle class, however, the party began to lose support steadily, until it collapsed after a rout in the 1979 elections. The party dissolved itself in 1984.

Founded in 1955, the St. Vincent Labour Party (SVLP), under R. Milton Cato, gained the support of the middle class. With a conservative law-and-order message and a pro-Western foreign policy, the SVLP dominated politics from the mid-1960s until the mid-1980s. Following victories in the 1967 and 1974 elections, the SVLP led the island to independence, winning the first post-independence election in 1979. Expecting an easy victory for the SVLP in 1984, Cato called early elections. The results were surprising: with a record 89% voter turnout, James F. Mitchell's New Democratic Party (NDP) won nine seats in the House of Assembly.

Bolstered by a resurgent economy in the mid-1980s, Mitchell led his party to an unprecedented sweep of all 15 House of Assembly seats in the 1989 elections. The opposition emerged from the election weakened and fragmented but was able to win three seats during the February 1994 elections under a "unity" coalition. In 1998, Prime Minister Mitchell and the NDP were returned to power for an unprecedented fourth term but with only a slim margin of 8 seats to 7 seats for the Unity Labour Party (ULP). The NDP was able to accomplish a return to power while receiving a lesser share of the popular vote, approximately 45% to the ULP's 55%.

In March 2001, the ULP, led by Ralph Gonsalves, assumed power after winning 12 of the 15 seats in Parliament. In the December 2005 parliamentary elections, Prime Minister Gonsalves and the ULP retained their 12-3 majority over the NDP. In the December 2010 parliamentary elections, Prime Minister Gonsalves and the ULP retained a slight majority, winning 8 of the 15 seats. The main opposition party, the NDP, won the remaining 7 seats.

ECONOMY
Banana production employs upwards of 60% of the work force and accounts for 50% of merchandise exports in St. Vincent and the Grenadines, with an emphasis on the main island of St. Vincent. Such reliance on one crop has made the economy vulnerable to fluctuations in banana prices and reduced European Union trade preferences. To combat these vulnerabilities, the Government of St. Vincent and the Grenadines is focused on diversifying its economy away from reliance on bananas. Recently, there has been a parallel reduction in licit agriculture and a rise in marijuana cultivation, making St. Vincent and the Grenadines the largest marijuana producer in the Eastern Caribbean.

In contrast to developments on the main island, tourism in the Grenadines has grown to become a very important part of the economy, and the chief earner of foreign exchange for the country as a whole. The Grenadines have become a favorite of high-end tourism and the focus of new development in the country. Super-luxury resorts, yachting tourism, and a commitment by the government to rehabilitate and protect the Tobago Keys as a national park have all contributed to strong tourism returns in the Grenadines.

St. Vincent and the Grenadines' currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7=U.S. $1.

St. Vincent and the Grenadines is a beneficiary of the U.S. Caribbean Basin Initiative that grants duty-free entry into the United States for many goods. St. Vincent and the Grenadines also belongs to the predominantly English-speaking Caribbean Community and Common Market (CARICOM) and the CARICOM Single Market and Economy (CSME).

FOREIGN RELATIONS
St. Vincent and the Grenadines maintains close ties to the United States, Canada, and the United Kingdom, and is a member of regional political and economic organizations such as the Organization of Eastern Caribbean States (OECS) and CARICOM. St. Vincent and the Grenadines is also a member of the United Nations, the Commonwealth of Nations, the Organization of American States (OAS), and the Association of Caribbean States (ACS). St. Vincent and the Grenadines has chosen to recognize Taiwan instead of the People's Republic of China.

U.S.-ST. VINCENT RELATIONS
The United States and St. Vincent have solid bilateral relations. Both governments are concerned with eradicating local marijuana cultivation and combating the transshipment of narcotics. In 1995, the United States and St. Vincent signed a Maritime Law Enforcement Agreement. In 1996, the Government of St. Vincent and the Grenadines signed an Extradition Treaty with the United States. In 1997, the two countries signed a Mutual Legal Assistance Treaty.

The United States supports the Government of St. Vincent and the Grenadines' efforts to expand its economic base and to provide a higher standard of living for its citizens. U.S. assistance is channeled primarily through multilateral agencies such as the World Bank. The United States has 27 Peace Corps volunteers in St. Vincent and the Grenadines, working in business development, education, and health. The U.S. military also provides assistance through construction and humanitarian civic action projects.

A relatively small number of Americans--fewer than 1,000--reside on the islands.

The United States maintains no official presence in St. Vincent. The Ambassador and Embassy officers are resident in Barbados and frequently travel to St. Vincent.

Principal U.S. Embassy Officials
Ambassador--vacant
Deputy Chief of Mission--D. Brent Hardt
Political/Economic Chief--Brian Greaney
Consul General--Eugene Sweeney
Commercial Affairs--Greg Floyd
Public Affairs Officer--Rebecca Ross
Peace Corps Director--Kevin Carley (resident in St. Lucia)

The U.S. Embassy in Barbados is located in the Wildey Business Park, Wildey, St. Michael (tel: 246-436-4950; fax: 246-429-5246).

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings. Country Specific Information exists for all countries and includes information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly monitor the Department's Bureau of Consular Affairs Internet web site at http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel Warnings can be found. Consular Affairs Publications, which contain information on obtaining passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For additional information on international travel, see http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT (1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7 days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. The CDC publication "Health Information for International Travel" can be found at http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including Background Notes and daily press briefings along with the directory of key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.



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