Background Notes

Background Notes : Aruba (11/09)

Tue, 17 Nov 2009 14:47:31 EDT

Background Note: Aruba

November 2009

Bureau of Western Hemisphere Affairs

Colorful storefronts line the streets of Aruba's capital, Oranjestad. October 2003. [© AP Images]

PROFILE

OFFICIAL NAME:
Aruba

Geography
Area: 180 sq. km. (112 sq. mi.).
Cities: Capital--Oranjestad.
Terrain: Flat with a few hills; scant vegetation.
Climate: Subtropical.

People
Nationality: Noun and adjective--Aruban(s).
Population (2006): 103,484.
Annual growth rate: 1.48%.
Ethnic groups: Mixed white/Caribbean Amerindian 80%, other 20%.
Religion: Roman Catholic 81%, Evangelist 4.1%, Protestant 2.5%, Jehovah’s Witness 1.5%, Methodist 1.2%, other 5.3%, unspecified or none 4.6%.
Languages: Dutch (official); Papiamento, Spanish, and English also are spoken.
Education: Literacy--97%.
Health: Infant mortality rate--13.79/1,000. Life expectancy--72 years for men, 78 years for women.
Work force (41,501): Most employment is in wholesale and retail trade and repair, followed by hotels and restaurants and oil refining. Unemployment--about 6.9% (2005 est.).

Government
Type: Parliamentary democracy.
Independence: Part of the Kingdom of the Netherlands.
Branches: Executive--monarch represented by a governor (chief of state), prime minister (head of government), Cabinet. Legislative--unicameral parliament. Judicial--Joint High Court of Justice appointed by the monarch.
Subdivisions: Aruba is divided into eight regions--Noord/Tank Leendert, Oranjestad (west), Oranjestad (east), Paradera, Santa Cruz, Savaneta, Sint Nicolaas (north), and Sint Nicolaas (south).
Political parties: People's Electoral Movement (MEP), Aruba People's Party (AVP), Network (RED), Aruba Patriotic Movement (MPA), Real Democracy (PDR), Aruba Liberal Organization (OLA), Aruba Patriotic Party (PPA), Aruba Democratic Alliance (ALIANSA), Socialist Movement of Aruba (MSA).
Suffrage: Universal at 18 years.

Economy
GDP (2007): $2.62 billion.
Growth rate (2007): 2.1%.
Per capita GDP (2007): $25,231.
Natural resources: Beaches. Tourism/services and oil refining are dominant factors in GDP.
Trade: Exports--$124 million (f.o.b., including oil re-exports and free zone, 2006): oil products, live animals and animal products, art and collectibles, machinery and electrical equipment, transport equipment. Major markets--Panama (29.7%), Colombia (17%), Netherlands Antilles (13.2%), U.S. (11.3%), Venezuela (10.9%), Netherlands (9.20%). Imports--$1.054 billion: crude petroleum, food, manufactures. Major suppliers--U.S. (54.6%), Netherlands (12%), U.K. (4.7%).

PEOPLE AND HISTORY
Aruba's first inhabitants were the Caquetios Indians from the Arawak tribe. Fragments of the earliest known Indian settlements date back to about 1000 A.D. Spanish explorer Alonso de Ojeda is regarded as the first European to arrive in about 1499. The Spanish garrison on Aruba dwindled following the Dutch capture of nearby Bonaire and Curacao in 1634. The Dutch occupied Aruba shortly thereafter, and retained control for nearly two centuries. In 1805, during the Napoleonic wars, the English briefly took control over the island, but it was returned to Dutch control in 1816. A 19th-century gold rush was followed by prosperity brought on by the opening in 1924 of an oil refinery. The last decades of the 20th century saw a boom in the tourism industry. In 1986 Aruba seceded from the Netherlands Antilles and became a separate, autonomous member of the Kingdom of the Netherlands. Movement toward full independence was halted at Aruba's prerogative in 1990. Aruba has a mixture of people from South America and Europe, the Far East, and other islands of the Caribbean.

GOVERNMENT
Part of the Kingdom of the Netherlands, Aruba has semi-autonomy on most internal affairs with the exception of defense, foreign affairs, final judicial review, and "Kingdom matters" including human rights and good governance. The constitution was enacted in January 1986. Executive power rests with a governor, while a prime minister heads an eight-member Cabinet. The governor is appointed for a 6-year term by the monarch and the prime minister and deputy prime minister are elected by the legislature, or Staten, for 4-year terms. The Staten is made up of 21 members elected by direct, popular vote to serve 4-year terms. Aruba's judicial system, mainly derived from the Dutch system, operates independently of the legislature and the executive. Jurisdiction, including appeal, lies with the Common Court of Justice of Aruba and the Kingdom-level Supreme Court of Justice in the Netherlands.

Principal Government Officials
Governor General--Fredis J. Refunjol
Prime Minister--Michiel Godfried (Mike) Eman
Deputy Prime Minister--Mike Eric de Meza
Minister of Economic Affairs, Social Affairs and Culture--Michelle Janice Hooyboer-Winklaar
Minister of General Affairs and Foreign Relations--Michiel Godfried (Mike) Eman
Minister of Finance, Communication, Utilities and Energy--Mike Eric de Meza
Minister of Health and Sport--Richard Wayne Milton Visser
Minister of Justice and Education--Arthur Lawrence Dowers
Minister of Tourism, Labor and Transport--Otmar Enrique Oduber
Minister of Integration, Infrastructure and Environment--Oslin Benito Sevinger
Minister Plenipotentiary to The Hague--Edwin Bibiano Abath
Minister Plenipotentiary to Washington, DC--Jocelyne Croes
President, Bank of Aruba--Jane R. Semeleer
Attorney General--Robert Pietersz

POLITICAL CONDITIONS
In the parliamentary elections of September 23, 2005, the People's Electoral Movement (MEP) gained 11 of the 21 seats available. Voter turnout was 85%. MEP had also won the previous September 2001 elections with 12 seats, forming Aruba's first one-party government. Despite losing one seat in the 2005 elections, the party retained a slim majority in Parliament. MEP's biggest rival, the Aruba People's Party (AVP), obtained 8 seats and remained the largest opposition party on the island. In September 2009 elections, the Aruba People's Party won a majority of seats.

ECONOMY
Through the 1990s and into the 21st century Aruba posted growth rates around 5%. However, in 2001, a decrease in demand and the terrorist attack on the United States led to the first economic contraction in 15 years. Deficit spending has been a staple in Aruba's history, and modestly high inflation has been present as well, although recent efforts at tightening monetary policy may correct this. Oil processing is the dominant industry in Aruba, despite the expansion of the tourism sector. Approximately 1.25 million tourists per year visit Aruba, with 75% of those from the United States. The sizes of the agriculture and manufacturing industries remain minimal.

FOREIGN RELATIONS
Aruba conducts foreign affairs through the Kingdom of the Netherlands, whose embassies and consulates issue visas for travel to the island. Aruba has strong relations with other Caribbean governments. Aruba is an observer in the Caribbean Community (CARICOM), an associate member of the World Trade Organization through the Netherlands, and is a full member of the Association of Caribbean States.

U.S.-ARUBA RELATIONS

Principal U.S. Officials
Chief of Mission/Consul General--Timothy J. Dunn
Vice Consul--vacant
Management Officer--Donald Feeney

The U.S. Consulate General for Aruba and the Netherlands Antilles is located at J.B. Gorsiraweg #1, Willemstad, Curacao; tel. 599-9-461-3066, fax: 599-9-461-6489, Monday through Friday, 8:00 am-5:00 pm. Email: infocuracao@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.

STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.

Background Notes : Trinidad and Tobago (11/09)

Fri, 13 Nov 2009 08:25:07 EDT

Background Note: Trinidad and Tobago

November 2009

Bureau of Western Hemisphere Affairs

Dancer competes during festival in Port-of-Spain, Trinidad, February 6, 2005. [© AP Images]

PROFILE

OFFICIAL NAME:
Republic of Trinidad and Tobago

Geography
Area: 5,128 sq. km. (1,980 sq. mi.), about the size of Delaware. Trinidad--4,828 sq. km. (1,864 sq. mi). Tobago--300 sq. km. (116 sq. mi).
Cities: Capital--Port of Spain (metropolitan pop. 310,000). Other cities and boroughs--San Fernando, Chaguanas, Arima, Scarborough (Tobago).
Terrain: Plains and low mountains.
Climate: Tropical; principal rainy season is June through December.

People
Nationality: Noun and adjective--Trinidadian(s) and Tobagonian(s). (Note: A popular combination name for Trinidadians and Tobagonians is Trinbagonians.)
Population (2007 est.): 1,303,188.
Annual growth rate: 0.4%.
Ethnic groups (2000): East Indian 40.0%, African 37.5%, mixed 20.5%, European 0.6%, Chinese 0.3%, other/not stated 1.1%.
Religions (2000): Roman Catholic 26.0%, Hindu 22.5%, Anglican 7.8%, Pentecostal 6.8%, Baptist 7.2%, other Christian 5.8%, Muslim 5.8%, Seventh Day Adventist 4%, other 10.8%, unspecified 1.4%, none 1.9%.
Language: English.
Education: Years compulsory--8. Literacy--98.6%.
Health: Infant mortality rate (2005 est.)--25.81/1,000. Life expectancy (2006 est.)--66 yrs. male; 68 yrs. female.
Work force (620,800, first quarter 2008): Trade and services 62.9%, construction 18.9%, manufacturing 9.5%, agriculture/sugar 3.8%, oil/gas 3.3%, utilities 1.5%.

Government
Type: Parliamentary democracy.
Independence: August 31, 1962.
Present constitution: September 24, 1976.
Branches: Executive--president (chief of state), prime minister (head of government), cabinet. Legislative--bicameral parliament. Judicial--independent court system; highest court of appeal is Privy Council (London).
Subdivisions: Nine regional corporations, two city corporations, three borough corporations, one ward (Trinidad); Tobago House of Assembly.
Political parties: People's National Movement (PNM); United National Congress (UNC); Congress of the People (COP); other minor parties, including the National Alliance for Reconstruction (NAR).
Suffrage: Universal at 18.

Economy (2008 est.)
GDP: U.S. $20.9 billion (current prices).
Annual growth rate: 3.5% (2008 est.), 5.5% (2007).
Per capita income: U.S. $18,864 (2008 est.).
Natural resources: Oil and natural gas, timber, fish.
Petroleum (oil, natural gas, petrochemicals): 46% of GDP.
Financial services: 11% of GDP.
Distribution including restaurants: 11% of GDP.
Manufacturing (food and beverages, assembly, chemicals, printing): 5% of GDP (excludes oil refining and petrochemical industries).
Construction and quarrying: 9% of GDP.
Transport/storage/communication: 5% of GDP.
Government services: 6% of GDP.
Education, cultural community services: 2.2% of GDP.
Electricity and water: 0.9% of GDP.
Agriculture (sugar, poultry, other meat, vegetables, citrus): 0.3% of GDP.
Hotels and guesthouses: 0.4% of GDP.

PEOPLE AND HISTORY
Columbus landed on and named Trinidad in 1498, and Spaniards settled the island a century later. Spanish colonizers largely wiped out the original inhabitants--Arawak and Carib Indians--and the survivors were gradually assimilated. Although it attracted French, free black, and other non-Spanish settlers, Trinidad remained under Spanish rule until the British captured it in 1797. During the colonial period, Trinidad's economy relied on large sugar and cocoa plantations. Tobago's development was similar to other plantation islands in the Lesser Antilles and quite different from Trinidad. During the colonial period, French, Dutch, and British forces fought over possession of Tobago, and the island changed hands 22 times--more often than any other West Indies island. Britain took final possession of Tobago in 1803. The two islands of Trinidad and Tobago were incorporated into a single colony in 1888. Trinidad and Tobago achieved full independence in 1962 and joined the British Commonwealth. Trinidad and Tobago became a republic in 1976.

The people of Trinidad and Tobago are mainly of African or East Indian descent. Virtually all speak English. Small percentages also speak Hindi, French patois, and several other dialects. Trinidad has two major folk traditions: Creole and East Indian. Creole is a mixture of African elements with Spanish, French, and English colonial culture. Trinidad's East Indian culture came to the island beginning May 30, 1845 with the arrival of indentured servants brought to fill a labor shortage created by the emancipation of the African slaves in 1838. Most remained on the land, and they still dominate the agricultural sector, but many have become prominent in business and the professions. East Indians have retained much of their own way of life, including Hindu and Muslim religious festivals and practices.

GOVERNMENT
Trinidad and Tobago is a unitary state, with a parliamentary democracy modeled after that of Great Britain. Although completely independent, Trinidad and Tobago acknowledged the British monarch as the figurehead chief of state from 1962 until 1976. In 1976 the country adopted a republican Constitution, replacing Queen Elizabeth with a president elected by Parliament. The general direction and control of the government rests with the cabinet, led by a prime minister and answerable to the bicameral Parliament.

The members of the House of Representatives are elected to terms of at least 5 years. Elections may be called earlier by the president at the request of the prime minister or after a vote of no confidence in the House of Representatives. Parliamentary elections took place on November 5, 2007; the number of seats contested in the House of Representatives in that vote increased from 36 to 41. The Senate's 31 members are appointed by the president: 16 on the advice of the prime minister, 6 on the advice of the leader of the opposition, and 9 independents selected by the president from among outstanding members of the community. Elected councils administer the nine regional, two city, and three borough corporations on Trinidad. Since 1980 the Tobago House of Assembly has governed Tobago with limited responsibility for local matters.

The country's highest court is the Court of Appeal, whose chief justice is appointed by the president after consultation with the prime minister and leader of the opposition. The Judicial Committee of the Privy Council in London decides final appeal on some matters. Member states of the Caribbean Community (CARICOM) selected Trinidad as the headquarters site for the new Caribbean Court of Justice (CCJ), which is intended eventually to replace the Privy Council for all CARICOM states. The CCJ heard its first case in August 2005. Despite having its seat in Port of Spain, the CCJ has not yet supplanted the Privy Council for Trinidad and Tobago due to a legislative dispute over constitutional reform.

Principal Government Officials
President--George Maxwell Richards
Prime Minister--Patrick Manning

Selected Short List of Key Ministers and Other Government Officials
Minister of Foreign Affairs--Paula Gopee-Scoon
Minister of Energy and Energy Industries --Conrad Enill
Minister of Finance--Karen Nunez-Tesheira
Minister of National Security--Martin Joseph
Minister of Trade and Industry--Mariano Browne
Attorney General--John Jeremie
Chief Justice--Ivor Archie
Ambassador to the U.S. and to the OAS--Glenda Morean-Phillip
Ambassador to the UN--Marina Valere

The embassy of the Republic of Trinidad and Tobago is located at 1708 Massachusetts Avenue NW, Washington, DC 20036 (tel. 202-467-6490; fax. 202-785-3130).

POLITICAL CONDITIONS
The first political party in Trinidad and Tobago with a continuing organization and program--the People's National Movement (PNM)--emerged in 1956 under Dr. Eric Williams, who became Prime Minister upon independence and remained in that position until his death in 1981. Politics have generally run along ethnic lines, with Afro-Trinidadians supporting the PNM and Indo-Trinidadians supporting various Indian-majority parties, such as the United National Congress (UNC). Most political parties, however, have sought to broaden their appeal, and their candidate lists for the November 2007 parliamentary elections reflected this.

The PNM remained in power following the death of Dr. Williams, but its 30-year rule ended in 1986 when the National Alliance for Reconstruction (NAR), a "rainbow party" aimed at Trinidadians of both African and Indian descent, won a landslide victory by capturing 33 of 36 seats. Tobago's A.N.R. Robinson, the NAR political leader, became Prime Minister. The NAR began to break down when the Indian component withdrew in 1988. Basdeo Panday, leader of the old United Labor Front (ULF), formed the new opposition with the UNC.

In July 1990, the Jamaat al Muslimeen, an extremist Black Muslim group with an unresolved grievance against the government over land claims, tried to overthrow the NAR government. The group held the prime minister and members of parliament hostage for 5 days while rioting and looting shook Port of Spain. After a long standoff with the police and military, Jamaat leader Yasin Abu Bakr and his followers surrendered to Trinidad and Tobago authorities. In 1992, the Court of Appeal upheld the validity of a government amnesty given to the Jamaat members during the hostage crisis. Abu Bakr and 113 other Jamaat members were jailed for two years while other courts debated the amnesty's validity. All 114 members were eventually released after a ruling by the U.K. Privy Council.

In 1991 elections, the NAR lost control of the government to the PNM, led by Patrick Manning who became prime minister. The Panday-led UNC finished second and replaced the NAR as chief opposition party. In 1995 Manning called for elections, in which the PNM and UNC both won 17 seats and the NAR won two seats. The UNC allied with the NAR and formed the new government, with Panday becoming prime minister--the first prime minister of East Indian descent. Although elections held in 2000 returned the UNC to power, the UNC government fell in 2001 with the defection of three of its parliamentarians, and the subsequent elections resulted in an even 18-18 split between the UNC and the PNM. President A.N.R. Robinson bypassed his former party colleague Panday by inviting PNM leader Manning to form a government, but the inability to break the tie delayed Parliament from meeting. Manning called elections in 2002, after which the PNM formed the next government with a 20-16 majority.

Elections were held again on November 5, 2007, with the PNM winning 26 seats and the UNC securing the remaining 15; the recently-formed Congress of the People party (COP) won no seats. Prime Minister Manning took his oath of office on November 7 to begin another 5-year term. All three major parties are committed to free market economic policies and increased foreign investment. Trinidad and Tobago has remained cooperative with the United States in the regional fight against narcotics trafficking and on other issues.

ECONOMY
The twin-island nation of Trinidad and Tobago experienced 16 consecutive years of real GDP growth through 2008 as a result of economic reforms adopted in the early 1990s, tight monetary policy and, until recently, buoyant markets for its export commodities. In 2007, the country experienced a real GDP growth rate of 5.5%. This moderated to 3.5% in 2008, with the country experiencing negative growth in the last quarter of 2008 and the first quarter of 2009 as export commodity prices fell in response to recessions in developed country markets.

The PNM-led government has largely avoided deficit spending in recent years, but a high non-energy fiscal deficit raises concerns for long-term sustainability, while rapid increases in infrastructure and recurrent spending have contributed to rising inflation. Falling prices for the country's major export commodities led the government to announce cuts in spending for fiscal year 2009, and the budget has gone into deficit. Long-term growth prospects nevertheless remain promising, as Trinidad and Tobago further develops its oil and gas resources and the industries dependent on natural gas, including petrochemicals, fertilizers, iron/steel and aluminum. Additional growth potential also exists in financial services, telecommunications and transport. Strong growth in Trinidad and Tobago over the past few years has led to trade surpluses, even with high import levels due to industrial expansion and increased consumer demand. The debt service ratio was 1.7% in 2008, up from 1.1% in 2007 but still below the 2006 level of 2.3%. Unemployment stood at 3.9% in the fourth quarter of 2008, and rose to 5% in the first quarter of 2009. An unemployment rate of 6%-7% is projected for 2009. Headline inflation crossed into double digits in May 2008, registering 14.3% (year-on-year) at the end of November. In an effort to contain inflation, the Central Bank repeatedly raised interest rates and reserve requirements, while issuing bonds to mop up excess liquidity. Latest inflation figures show a drop to under 10% (year-on-year). There are no currency or capital controls, and the Central Bank maintains the TT dollar in a lightly managed, stable float against the U.S. dollar. During 2008, the exchange rate fluctuated between TT$6.1573 and TT$6.3573 to U.S. $1. The rate as of August 26, 2009 was TT$6.3401 to U.S. $1 (selling rate).

Trinidad and Tobago has made a transition from an oil-based economy to one based on natural gas. Natural gas production over the period October 2007 through April 2008 was 115.2 million cubic meters per day, up from 111.9 million cubic meters per day over the same period in 2006-2007. About half of the country's natural gas production is converted into liquefied natural gas (LNG) at the Atlantic LNG facility in Trinidad and exported under long-term contracts and on the spot market. Trinidad and Tobago is the fifth-largest exporter of LNG in the world and the single largest supplier of LNG to the U.S., providing two-thirds of all LNG imported into the U.S. since 2002. Natural gas production continues to expand and should meet the needs of new industrial plants coming on stream over the next few years, including iron, aluminum, ethylene, and propylene. The petrochemical sector includes plants producing methanol, ammonia, urea, and natural gas liquids; after steady growth in recent years, this sector more than any other felt the impact of a global economic slowdown in late 2008. A number of plants responded with temporary shutdowns.

Growth in the non-energy sector was projected to slow from 7.7% in 2007 to 4.8% in 2008. The manufacturing sector was estimated to be growing by 4.2% in 2008, down from 14.9% in 2007. Services sector growth was expected to slow to 4.9% in 2008 from 6.6% in 2007. An increase of 8.6% was projected for the domestic agriculture sector, in response to several government initiatives. The government also is seeking to diversify the economy to reduce dependence on the energy sector and to achieve self-sustaining growth. The Ministry of Finance is coordinating the launch of an international financial center. The Ministry of Trade and Industry is leading efforts to develop seven other sectors where the country is believed to have a comparative advantage: yachting; fish and fish processing; merchant marine; music and entertainment; film; food and beverage; and printing and packaging. A national research and development fund will be established to stimulate innovation and investment in a new technology park, currently under construction.

Trinidad and Tobago has an open investment climate. Since 1992, almost all investment barriers have been eliminated. The government has a double taxation agreement, a bilateral investment treaty and an intellectual property rights agreement with the United States. The stock of U.S. direct investment in Trinidad and Tobago was $3.8 billion (book value) as of 2007. Total foreign direct investment inflows over the four years 2004-2007 amounted to approximately U.S. $3.8 billion. Among recent and ongoing investment projects are several involving U.S. firms. In December 2006, Nucor began producing direct reduced iron for shipment to the U.S. at its plant in Trinidad, which has a production capacity of 2.0 million tons per year. World GTL is building the first commercial gas-to-liquids plant in the hemisphere. Several U.S.-branded hotel chains have entered the market; most recently, a Hyatt-managed hotel opened in early 2008, part of a multimillion-dollar waterfront development project in Port of Spain.

Trinidad and Tobago's infrastructure is adequate by regional standards. Expansion of the Crown Point airport on Tobago is being planned, which follows opening of the Piarco terminal on Trinidad in 2000. There is an extensive network of paved roads. Traffic is a worsening problem throughout Trinidad, as the road network is not well suited to the rising volume of vehicles and only a rudimentary mass transport system exists as an alternative. Utilities are fairly reliable in cities, but some rural areas suffer from power failures and water shortages in the dry season. Flooding in the rainy season due to inadequate drainage affects urban and rural areas alike. Infrastructure improvement is one of the government's budget priorities, although late 2008 budget cuts driven by falling export revenue will delay the start of many new projects. Infrastructure plans include housing, roads and bridges, rural electrification, flood control, and improved water supply, drainage, and sewerage. The government has awarded a contract for the preliminary design of a light rail system which is projected to be completed in five to six years.

Telephone service is modern and fairly reliable, although significantly more costly to consumers than comparable U.S. service, including for wireline, wireless, and broadband services. Two wireless providers, bmobile and Digicel, are currently operational, while a third is to be awarded in 2009. Two companies, Telestar Cable System Limited and Green Dot Limited, won an October 2007 Telecommunication Authority of Trinidad and Tobago (TATT) auction for radio spectrum to provide public Broadband Wireless Access (BWA) services. Improvements in service and price are likely as competition in the Internet services market increases in coming years.

FOREIGN RELATIONS
As the most industrialized and second-largest country in the English-speaking Caribbean, Trinidad and Tobago has taken a leading role in the Caribbean Community and Common Market (CARICOM), and strongly supports CARICOM economic integration efforts and has advocated for a greater measure of political security and integration. CARICOM members are working to establish a Single Market and Economy (CSME). In early 2006, Trinidad and Tobago, in conjunction with the larger CARICOM nations, inaugurated the CARICOM Single Market, a precursor to the full CSME. As a first step toward greater security integration, Trinidad and Tobago and the other members of CARICOM collaborated with the U.S. on an Advance Passenger Information System in preparation for the 2007 Cricket World Cup tournament, which took place in nine Caribbean venues in March and April 2007.

Trinidad and Tobago is active in the Summit of the Americas (SOA) process of the Organization of American States (OAS) and hosted the fifth Summit of the Americas in April 2009, attended by President Obama. It has hosted hemisphere-wide ministerial meetings on energy (2004), education (2005), and labor (2007), as well as an OAS meeting on terrorism and security (2005). It also hosted a negotiating session in 2003 for the OAS Free Trade Area of the Americas (FTAA) and campaigned to host an eventual FTAA secretariat. Trinidad also will play host to the November 2009 Commonwealth Heads of Government Meeting.

Trinidad and Tobago is a democracy that maintains close relations with its Caribbean neighbors and major North American and European trading partners. After its 1962 independence, Trinidad and Tobago joined the UN and the Commonwealth. In 1967, it became the first Commonwealth country to join the OAS. In 1995, Trinidad played host to the inaugural meeting of the Association of Caribbean States and has become the headquarters location for this 25-member grouping, which seeks to further economic progress and cooperation among its members.

U.S.-TRINIDAD AND TOBAGO RELATIONS
The United States and Trinidad and Tobago enjoy cordial relations. U.S. interests here and throughout the hemisphere include a focus on increasing investment and trade, and ensuring more stable supplies of energy. They also include enhancing Trinidad and Tobago's political and social stability and positive regional role through assistance in drug interdiction, health issues, and legal and security affairs. The U.S. embassy was established in Port of Spain in 1962, replacing the former consulate general.

International Military Education and Training (IMET) and Foreign Military Financing (FMF) programs were suspended in 2003 under the terms of the American Service Members Protection Act (ASPA), because Trinidad and Tobago, a member of the International Criminal Court, had not concluded a bilateral non-surrender or "Article 98" agreement with the United States. However, when the Congress de-linked IMET funding from the Article 98 sanctions, a nominal allocation of $45,000 in IMET was reinstated for late 2007 and the program has since grown. Currently, the main source of financial assistance provided to security forces is through State Department's Bureau of International Narcotics and Law Enforcement funds, Traditional Commander's Activities funds, the State Partnership Program (with Delaware), and IMET. Assistance to Trinidad and Tobago from U.S. military, law enforcement authorities, and in the area of health issues remains important to the bilateral relationship and to accomplishing U.S. policy objectives.

The U.S. Government also provides technical assistance to the Government of Trinidad and Tobago through a number of existing agreements. The Department of Homeland Security has a Customs Advisory Team working with the Ministry of Finance to update its procedures. Similarly, the Treasury Department had an Internal Revenue Service (IRS) advising team that worked with the Board of Inland Revenue modernizing its tax administration; this long-running project ended in October 2007. The U.S. Centers for Disease Control and Prevention (CDC), a part of the Department of Health and Human Services, collaborates with the Trinidad-based Caribbean Epidemiology Center (CAREC) and other regional partners to provide technical assistance and financial support for HIV/AIDS-related epidemiology surveillance and public health training in the region.

U.S. commercial ties with Trinidad and Tobago have always been strong and have grown substantially in the last 10 years due to economic liberalization in the 1990s. U.S. firms have invested more than a billion dollars in recent years--mostly in the petrochemical, oil/gas, and iron/steel sectors. Many of America's largest corporations have commercial links with Trinidad and Tobago, and more than 30 U.S. firms have offices and operations in the country. Trinidad and Tobago is the leading beneficiary of the U.S. Caribbean Basin Initiative (CBI). The U.S. embassy actively fosters bilateral business ties. A double-taxation agreement has existed since the early 1970s. A tax information exchange agreement was signed in 1989, and a Bilateral Investment Treaty (BIT) and an intellectual property rights agreement were signed in 1994. The BIT entered into force in 1996. Other agreements include extradition and mutual legal assistance treaties, which have been in force since 1999. An agreement on maritime cooperation was signed in 1996.

There are large numbers of U.S. citizens and permanent residents of Trinidadian origin living in the United States (mostly in New York and Florida), which keeps cultural ties strong. About 20,000 U.S. citizens visit Trinidad and Tobago on vacation or for business every year, and more than 6,500 American citizens are residents.

Principal U.S. Embassy Officials
Ambassador--vacant
Deputy Chief of Mission--Len Kusnitz
Political/Economic Chief--Jeff Mazur
Consular Chief--Cynthia Ebeid
Management Officer--Chris Szymanski
Regional Security Officer--Darryl Waller
Public Affairs Officer--Matthew Cassetta

The U.S. Embassy is located at 15 Queen's Park West, Port of Spain (tel. 868 622-6371, fax: 868 822-5905).

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.

Background Notes : Suriname (11/09)

Thu, 19 Nov 2009 12:26:56 EDT

Background Note: Suriname

November 2009

Bureau of Western Hemisphere Affairs

Amerindians participate in commemorative ceremony, Paramaribo, Suriname July 1, 2003. [© AP Images]

PROFILE

OFFICIAL NAME:
Republic of Suriname

Geography
Area: 163,194 sq. km. (63,037 sq. mi.); slightly larger than Georgia.
Cities: Capital--Paramaribo (pop. 242,946). Other cities--Nieuw Nickerie, Moengo, Brownsweg, Albina.
Terrain: Rain forest, savanna, coastal swamps, hills.
Climate: Tropical.

People
Nationality: Noun--Surinamer(s). Adjective--Surinamese.
Population (2004 census): 492,829.
Annual growth rate (2004): 1.30%.
Ethnic groups (2004 census): Hindustani (East Indian) 27%, Creole 18%, Javanese 15%, Maroon 15%, mixed 12.5%, Amerindians 3.7%, Chinese 1.8%.
Religions: Hindu, Muslim, Roman Catholic, Dutch Reformed, Moravian, several other Christian denominations, Jewish, Baha'i.
Languages: Dutch (official), English (widely spoken in Paramaribo), Sranan Tongo (Creole language), Hindustani, Javanese.
Education: Years compulsory--ages 6-12. Literacy--90%.
Health: Infant mortality rate (2004)--7 per 1,000. Life expectancy (2003)--71 yrs.
Work force (100,000): Government--35%; private sector--41%; parastatal companies--10%; unemployed--14%.

Government
Type: Constitutional democracy.
Constitution: September 30, 1987.
Independence: November 25, 1975.
Branches: Executive--President, Vice President, Council of Ministers. Legislative--elected 51-member National Assembly made up of representatives of political parties. Judicial--Court of Justice.
Administrative subdivisions: 10 districts.
Political parties: Governing coalition--National Party of Suriname (NPS); Progressive Reform Party (VHP); Pertjaja Luhur; A - Combination, a coalition of General Interior Development Party (ABOP), Brotherhood and Unity in Politics (BEP), and Seeka; Suriname Workers Party (SPA); Democratic Alternative '91 (DA '91). Other parties in the National Assembly--National Democratic Party (NDP), Democratic National Platform 2000 (DNP 2000), Alternative 1 (A1), Party for Renewal and Development (BVD), Javanese Indonesian Peasants Party (KTPI).
Suffrage: Universal at 18.

Economy
GDP (2008 est.): $2.81 billion (Source: IMF).
Annual growth rate real GDP (2007 actual): 5.5%.
Per capita GDP (2007 est.): $4,830.
Inflation (2007): 7.0%.
Natural resources: Bauxite, gold, oil, iron ore, other minerals; forests; hydroelectric potential; fish and shrimp.
Agriculture: Products--rice, bananas, timber, citrus fruits, fish and shrimp.
Industry: Types--alumina, oil, gold, fish and shrimp processing, lumber.
Trade (Source: IMF): Exports (2007)--$1.542 billion: alumina, gold, crude oil, wood and wood products, rice, bananas, fish, and shrimp. Major markets (2007)--Canada (23%), Norway (14.4%), U.S. (12.1%), Trinidad (7.2%), France (5.4%), Iceland (2.1%). Imports (2007)--$1.242 billion: machinery and transport equipment, manufactured goods, mineral fuels including lubricants, food and live animals. Major suppliers (2007)--U.S. (31.7%), Netherlands (20.4%), Trinidad and Tobago (17.9%), Japan (3.6%), China (5.5%), Brazil (2.9%).

PEOPLE
Most Surinamers live in the narrow, northern coastal plain. For its size, the population is one of the most ethnically diverse in the world. Each ethnic group preserves its own culture, and many institutions, including political parties, tend to follow ethnic lines. Informal relationships vary: the upper classes of all ethnic backgrounds mix freely; outside of the elite, social relations tend to remain within ethnic groupings. All groups may be found in schools and the workplace.

HISTORY
Arawak and Carib tribes lived in the region before Columbus sighted the coast in 1498. Spain officially claimed the area in 1593, but Spanish and Portuguese explorers of the time gave the area little attention. Dutch settlement began in 1616 at the mouths of several rivers between present-day Georgetown, Guyana, and Cayenne, French Guiana.

Suriname became a Dutch colony in 1667. The new colony, Dutch Guiana, did not thrive. Historians cite several reasons for this, including Holland's preoccupation with its more extensive (and profitable) East Indian territories, violent conflict between whites and native tribes, and frequent uprisings by the imported slave population, which was often treated with extraordinary cruelty. Barely, if at all, assimilated into plantation society, many of the slaves fled to the interior, where they maintained a West African culture and established the six major “Bush Negro” (or Maroon) tribes in existence today: the Djuka, Saramaccaner, Matuwari, Paramaccaner, Quinti, and Aluku.

Plantations steadily declined in importance as labor costs rose. Rice, bananas, and citrus fruits replaced the traditional crops of sugar, coffee, and cocoa. Exports of gold rose beginning in 1900. The Dutch Government gave little financial support to the colony. Suriname's economy was transformed in the years following World War I, when an American firm (ALCOA) began exploiting bauxite deposits in East Suriname. Bauxite processing and then alumina production began in 1916. During World War II, more than 75% of U.S. bauxite imports came from Suriname.

In 1951, Suriname began to acquire a growing measure of autonomy from the Netherlands. Suriname became an autonomous part of the Kingdom of the Netherlands on December 15, 1954, and gained independence, with Dutch consent, on November 25, 1975.

Most of Suriname's political parties took shape during the autonomy period and were overwhelmingly based on ethnicity. For example, the National Party of Suriname found its support among the Creoles, the Progressive Reform Party members came from the Hindustani population, and the Indonesian Peasant's Party was Javanese. Other smaller parties found support by appealing to voters on an ideological or pro-independence platform; the Partij Nationalistische Republiek (PNR) was among the most important. Its members pressed most strongly for independence and for the introduction of leftist political and economic measures. Many former PNR members would go on to play a key role following the coup of February 1980.

Suriname was a parliamentary democracy in the years immediately following independence. Henk Arron became the first Prime Minister and was re-elected in 1977. On February 25, 1980, 16 noncommissioned officers overthrew the elected government, which many accused of inefficiency and mismanagement. The military-dominated government then suspended the constitution, dissolved the legislature, and formed a regime that ruled by decree. Although a civilian filled the post of president, a military man, Desi Bouterse, actually ruled the country.

Throughout 1982, pressure grew for a return to civilian rule. On December 8, 1982, military authorities cracked down, arresting and killing 15 prominent opposition leaders, including journalists, lawyers, and trade union leaders.

Following the murders, the United States and the Netherlands suspended economic and military cooperation with the Bouterse regime, which increasingly began to follow an erratic but often leftist-oriented political course. The regime restricted the press and limited the rights of its citizens. The economy declined rapidly after the suspension of economic aid from the Netherlands.

Continuing economic decline brought pressure for change. During the 1984-87 period, the Bouterse regime tried to end the crisis by appointing a succession of nominally civilian-led cabinets. Many figures in the government came from the traditional political parties that had been shoved aside during the coup. The military eventually agreed to free elections in 1987, a new constitution, and a civilian government.

Another pressure for change had erupted in July 1986, when a Maroon insurgency, led by former soldier Ronnie Brunswijk, began attacking economic targets in the country's interior. In response, the army ravaged villages and killed suspected Brunswijk supporters. Thousands of Maroons fled to nearby French Guiana. In an effort to end the bloodshed, the Surinamese Government negotiated a peace treaty in 1989 with Brunswijk, called the Kourou Accord. However, Bouterse and other military leaders blocked the accord's implementation.

On December 24, 1990, military officers forced the resignations of the civilian president and vice president who had been elected in 1987. Military-selected replacements were hastily approved by the National Assembly on December 29. Faced with mounting pressure from the U.S., other nations, the Organization of American States (OAS), and other international organizations, the government held new elections on May 25, 1991. The New Front (NF) Coalition, comprised of the Creole-based National Party of Suriname (NPS), the Hindustani-based Progressive Reform Party (VHP), the Javanese-based Indonesian Peasant's Party (KTPI) and the labor-oriented Surinamese Workers Party (SPA) were able to win a majority in the National Assembly. On September 6, 1991, NPS candidate Ronald Venetiaan was elected President, and the VHP's Jules Ajodhia became Vice President.

The Venetiaan government was able to effect a settlement to Suriname's domestic insurgency through the August 1992 Peace Accord with Bush Negro (Maroon) and Amerindian rebels. In April 1993, Desi Bouterse left his position as commander of the armed forces and was replaced by Arthy Gorre, a military officer committed to bringing the armed forces under civilian government control. Economic reforms instituted by the Venetiaan government eventually helped curb inflation, unify the official and unofficial exchange rates, and improve the government's economic situation by re-establishing relations with the Dutch, thereby opening the way for a major influx of Dutch financial assistance. Despite these successes, the governing coalition lost support and failed to retain control of the government in the subsequent round of national elections. The rival National Democratic Party (NDP), founded in the early 1990s by Desi Bouterse, benefited from the New Front government's loss of popularity. The NDP won more National Assembly seats (16 of 51) than any other party in the May 1996 national elections, and in September 1996, joined with the KTPI, dissenters from the VHP, and several smaller parties to elect NDP vice chairman Jules Wijdenbosch president of an NDP-led coalition government. Divisions and subsequent reshufflings of coalition members in the fall of 1997 and early 1998 weakened the coalition's mandate and slowed legislative action.

In May 1999, after mass demonstrations protesting poor economic conditions, the government was forced to call early elections. The elections in May 2000 returned Ronald Venetiaan and his New Front coalition to the presidency. The NF based its campaign on a platform to fix the faltering Surinamese economy.

In the national election held on May 25, 2005, the ruling NF coalition suffered a significant setback due to widespread dissatisfaction with the state of the economy and the public perception that the NF had produced few tangible gains. The NF won just 23 seats, falling short of a majority in the National Assembly, and immediately entered into negotiations with the Maroon-based "A" Combination and the A-1 Coalition to form a working majority. Desi Bouterse's NDP more than doubled its representation in the National Assembly, winning 15 seats. Bouterse, the NDP's declared presidential candidate, withdrew from the race days before the National Assembly convened to vote for the next president and tapped his running mate, Rabin Parmessar, to run as the NDP's candidate. In the National Assembly, the NF challenged Parmessar's Surinamese citizenship, displaying copies of a Dutch passport issued to Parmessar in 2004. Parmessar was eventually allowed to stand for election, and parliament later confirmed his Surinamese citizenship. After two votes, no candidate received the required two-thirds majority, pushing the final decision in August 2005 to a special session of the United People's Assembly, where President Venetiaan was reelected with a significant majority of votes from the local, district, and national assembly members gathered. His running mate, Ramdien Sardjoe, was elected as vice president. While the Venetiaan administration has made progress in stabilizing the economy, tensions within the coalition have impeded progress and stymied legislative action.

Long-anticipated legal proceedings against those accused of participating in the December 1982 murders began in November 2007 with the issuance of summonses to 25 defendants, including opposition leader Desi Bouterse. The court martial tribunal convened on November 30, 2007, with a series of preliminary motions. The actual trial, with judges hearing witness testimonies, started on July 4, 2008.

GOVERNMENT
The Republic of Suriname is a constitutional democracy based on the 1987 constitution. The legislative branch of government consists of a 51-member unicameral National Assembly, simultaneously and popularly elected for a 5-year term.

The executive branch is headed by the president, who is elected by a two-thirds majority of the National Assembly or, failing that, by a majority of the People's Assembly for a 5-year term. If at least two-thirds of the National Assembly cannot agree to vote for one presidential candidate, a People's Assembly is formed from all National Assembly delegates and regional and municipal representatives who were elected by popular vote in the most recent national election. A vice president, normally elected at the same time as the president, needs a simple majority in the National Assembly or People's Assembly to be elected for a 5-year term. As head of government, the president appoints a cabinet of ministers, currently numbered at 17 and apportioned among the various political parties represented in the ruling coalition. There is no constitutional provision for removal or replacement of the president unless he resigns.

A 15-member State Advisory Council advises the president in the conduct of policy. Eleven of the 15 council seats are allotted by proportional representation of all political parties represented in the National Assembly. The president chairs the council; two seats are allotted to representatives of labor, and two are allotted to employers' organizations.

The judiciary is headed by the Court of Justice (Supreme Court). This court supervises the magistrate courts. Members are appointed for life by the president in consultation with the National Assembly, the State Advisory Council, and the National Order of Private Attorneys.

The country is divided into 10 administrative districts, each headed by a district commissioner appointed by the president. The commissioner is somewhat similar to the governor of a U.S. state but serves at the president's pleasure.

Principal Government Officials
President--Runaldo Ronald Venetiaan
Vice President--Ramdien Sardjoe
Foreign Minister--Lygia Kraag-Keteldijk
Ambassador to U.S.--Jacques R. Kross
Ambassador to UN--Henry MacDonald
Ambassador to OAS--Jacques R. Kross

Suriname maintains an embassy in the United States at 4301 Connecticut Ave, NW, Suite 460, Washington, DC 20008 (tel. 202-244-7488; fax. 202-244-5878). The embassy also manages Suriname's representation to the Organization of American States (OAS). Suriname has a separate mission to the UN, located at 866 United Nations Plaza, Suite 320, New York, NY 10017 (tel. 212-826-0660; fax. 212-980-7029). There also is a Suriname consulate general at 6303 Blue Lagoon Drive, Suite 325, Miami, FL 33126 (tel. 305-265-4655, fax. 305-265-4599).

NATIONAL SECURITY
Surinamese armed forces consist of the national army, air force, navy, and military police, which are collectively referred to as the “national army,” under the control of the Minister of Defense. A smaller civil police force is under the authority of the Minister of Justice and Police. The national armed forces comprise some 2,500 personnel, the majority of whom are deployed as light infantry security forces. The Netherlands has provided limited military assistance to the Surinamese armed forces since the election of a democratic government in 1991. In recent years, the U.S. has provided training to military officers and policymakers to promote a better understanding of the role of the military in a civilian government, as well as to improve the professional capabilities of its officers and senior personnel. The U.S. also provides assistance and training for disaster preparedness and mitigation as well as significant support for humanitarian aid projects. Since the mid-1990s, the People's Republic of China has provided small amounts of military equipment and logistical material to the Surinamese armed forces. The Netherlands, France, Venezuela, and Brazil also have working relationships with the Surinamese military.

Suriname's borders are porous; largely uninhabited, unguarded, and ungoverned rain forest and rivers make up the eastern, western, and southern borders, and the navy's capability to police Suriname's northern Atlantic coast is limited. Protecting natural resources from illegal exploitation such as unlicensed gold mining is difficult, and significant tax revenue is lost. Porous borders also make Suriname a target for transshipment of drugs.

ECONOMY
Suriname's economy has been dominated by the exports of alumina, oil, and gold. Other export products include bananas, shrimp and fish, rice, and lumber. In 2007, gold, alumina, and oil accounted for 31.7%, 41.9%, and 7%, respectively, of Suriname's exports. Both the oil and gold sector continued their strong performances in 2008, while the world economic downturn instigated a restructuring of the bauxite sector. The International Monetary Fund (IMF) expected Suriname’s economy to grow in 2009 by 3%, while the Economist Intelligence Unit Country Report (April 2009) predicted the country’s GDP would contract by 2%. Even though some economic diversification has taken place, the country's economy remains dependent on its mineral resources.

Suriname's bauxite deposits have been among the world's richest. Active in Suriname since 1916, SURALCO, a subsidiary of the Aluminum Company of America (ALCOA), has had a long-standing working relationship with the Australian-owned BHPBilliton. The year 2008 was a turning point in the future of bauxite in Suriname. Talks between the government and BHPBilliton on the joint development of the Bakhuys Reserves in west Suriname broke down in October 2008. Soon afterwards BHPBilliton, citing a drop in the world demand for aluminum, severe losses by its parent company caused by the world economic downturn, and the uncertainty of future endeavors in Suriname, announced it would cease operations in Suriname. BHPBilliton announced it would end its 70-year presence in Suriname in 2010, departing after the conclusion of its joint venture agreement with SURALCO, which includes mining Kaaimangrasie and Klaverblad mines until depletion, predicted for 2010. BHPBilliton also announced it would turn over to SURALCO its 45% stake in the refinery. The government set up its own mining company, ALUMSUR, and on April 22, 2009 signed a memorandum of understanding (MOU) with the Swiss Glencore International AG which will finance the development of ALUMSUR to take over the BHPBilliton operations after 2010. Delays in the process of issuing new mining concessions will lead to a gap in refining operations in 2010; SURALCO announced a reduction in the refinery’s capacity in order to retain enough bauxite to keep the refinery operational after 2010. Other proven reserves, sufficient to last until 2045, exist in the east, west, and north of the country. However, distance and topography make their immediate development costly.

The gold mining sector has both a formal and an informal component. The informal component is a highly unregulated, untaxed, small-scale service gold mining sector that takes place primarily in the southern and southeastern parts of the country. Because of a crackdown on illegal small-scale mining in French Guiana, this sector has seen an influx of Brazilians. This sector also has been linked to different social, health, environmental, and criminal issues. To date, the government has been unable bring this sector under its control. In the formal gold mining sector Rosebel Gold Mine (RGM), a wholly-owned subsidiary of the Canadian firm IAMGOLD, remains the only operator. IAMGOLD reported that its earnings for the first quarter of 2009 rose to U.S. $155.48 million, with the Rosebel Gold Mine in Suriname accounting for almost 50% of those earnings (reportedly U.S. $67.48 million, an increase of U.S. $2 million compared to the same period last year). In 2008, the company commenced an expansion program estimated to cost approximately U.S. $40 million. This expansion will include a complete upgrade of its machinery and the installation of a second mill. An investment in exploration also led to RGM increasing its reserves in 2008 by 20% (673,000 troy ounces). A joint venture between SURALCO and Newmont Mining Corporation established Surgold, potentially the second operator in Suriname. Initial exploratory research indicated possible reserves of up to 3 million troy ounces in the Nassau Plateau in southeast Suriname. Surgold commenced negotiations with the government for a production license in 2008, but a downward revision in the estimated reserves in the area put these negotiations on hold.

The sector with the most promising outlook for rapid, near-future expansion is the oil sector. A 2000 study by the U.S. Geological Survey estimates 15 billion barrels of oil in the Guyana Plateau. The state-owned oil company, Staatsolie, is by law the only company with the right to operate in Suriname’s oil sector. Other companies can only access the market through production-sharing agreements with Staatsolie. In 2008 Staatsolie produced a record 6 million barrels, which was an increase of 8.5% over 2007. With record high prices for oil in the first half of 2008, the company reported record profits of over half a billion U.S. dollars. In its onshore activities the company commenced a U.S. $60 million exploration program across the coastal area to increase its reserves by 64 million barrels. The design project for the expansion of the Staatsolie refinery entered its final phase, and at a cost of $400 million will expand the company’s refining capacity from 7,000 bpd to 15,000 bpd and expand the company’s product line to include premium diesel and gasoline.

In April 2008 the Spanish Repsol YPF commenced test drilling off Suriname’s coast. In July the company reported that the results of the test drilling were inconclusive, and the complex configuration of the soil made it difficult to assess whether or not oil was present. In November 2008 U.S. company Murphy Oil Corporation and Staatsolie announced that Murphy Oil Corporation had contracted the Geo Celtic, the largest purpose-built seismic vessel in the world, from Fugro Norway in order to conduct 3D seismic research off Suriname’s coast in Block 37. This U.S. $50 million research project was expected to take place between November 2008 and January 2009. A month later, in December 2008, the Japanese oil company Tokeiku announced that it would piggyback on the Geo Celtic’s presence off Suriname’s coast and would commence its 3D seismic research immediately following the completion of Murphy’s research. Results are not available from either study. In November 2008 Staatsolie commenced a bidding round for two blocks offshore, which were expected to be awarded in July 2009.

Suriname has also attracted the attention of international companies interested in extensive development of a tropical hardwoods industry and possible diamond mining. However, proposals for exploitation of the country's tropical forests and undeveloped regions of the interior traditionally inhabited by indigenous and Maroon communities have raised the concerns of environmentalists and human rights activists in Suriname and abroad.

The shortage of affordable energy continues to hamper the expansion of the industrial sector in Suriname. The largest companies in the gold and bauxite sector, as well as larger manufacturing companies, run their operations primarily on diesel-powered generators. SURALCO indicated that any expansion of operations to include mining and refining reserves in western Suriname will depend on Suriname expanding its energy-generating sources. The primary energy sources Suriname has at present are the Afobakka Hydro Dam, with an installed capacity of 180 megawatts (MW); a diesel generator power plant owned by the State Electricity Company with a capacity of 45 MW; and a diesel generator plant owned by Staatsolie with a current capacity of 14 MW, which Staatsolie plans to expand to 18 MW. There is no indication that the Ministry of Natural Resources has any immediate plans to work on the expansion of the energy supply of the country.

Suriname’s tourism sector has seen growth. In the past seven years the number of hotels has grown by 200%, while the number of tour operators has grown by 170%. In 2007 approximately 163,000 tourists visited Suriname, with the majority coming from the Netherlands. Nearly 190,000 tourists arrived in Suriname in 2008, with the majority from the Netherlands but a growing number of “weekend tourists” from French Guiana. Suriname, French Guiana, and the three Brazilian states Amapa, Para, and Amazones entered into an Amazon Tourism Agreement that focuses on joint promotion of the Amazon as a tourism destination. Through the Tourism Foundation, the government is making significant efforts to structure this sector. Two major hotel chains, Marriot and Wyndham, are opening franchises in Suriname (Marriot: 2009; Wyndham: 2010). Major regional airlines, Caribbean Airlines and Insel Air, have increased their flights to Suriname, while the national carrier, Surinam Airways, is expanding its fleet and developing new destinations.

The government’s efforts to privatize three parastatals stagnated. Both the wood processing company Bruynzeel and the rice company SML were taken off the market. Privatization of the banana company, SBBS, may still move forward. After putting SBBS up for bid, the government entered into negotiation with the Belgian international fruits and vegetables conglomerate Univeg Group.

FOREIGN RELATIONS
Since gaining independence, Suriname has become a member of the United Nations, the Organization of American States, the Organization of the Islamic Conference, and the Non-Aligned Movement. Suriname is a member of the Caribbean Community and Common Market and the Association of Caribbean States; it is associated with the European Union through the Lome Convention. The Netherlands remains Suriname's biggest donor, but it has been surpassed by the U.S. as a trade partner. Suriname participates in the Amazonian Pact, a grouping of the countries of the Amazon Basin that focuses on protection of the Amazon region's natural resources from environmental degradation. Reflecting its status as a major bauxite producer, Suriname is also a member of the International Bauxite Association. The country also belongs to the Economic Commission for Latin America, the Inter-American Development Bank, the Islamic Development Bank, the International Finance Corporation, the World Bank, and the International Monetary Fund. In 2008, Suriname signed the Rome Statute of the International Criminal Court.

At independence, Suriname signed an agreement with the Netherlands providing for about $1.5 billion in development assistance grants and loans over a 10- to 15-year period. Initial disbursements amounted to about $100 million per year, but were discontinued during military rule. After the return to a democratically elected government in 1991, Dutch aid resumed. The Dutch relationship continued to be an important factor in the economy, with the Dutch insisting that Suriname undertake economic reforms and produce specific plans acceptable to the Dutch for projects on which aid funds could be spent. In 2000, the Dutch revised the structure of their aid package and signaled to the Surinamese authorities their decision to disburse aid by sectoral priorities as opposed to individual projects. In 2001 both governments agreed to spend the remaining development funds to finance programs in 6 different sectors: health care, education, environment, agriculture, housing, and governance.

Bilateral cooperation agreements with several countries in the region have underscored the government's interest in strengthening regional ties. The return to Suriname from French Guiana of about 8,000 refugees from the 1986-91 Interior War between the military and domestic insurgents has improved relations with French authorities. Longstanding border disputes with Guyana and French Guiana remain unresolved. Negotiations with the Government of Guyana brokered by the Jamaican Prime Minister in 2000 did not produce an agreement, but the countries agreed to restart talks after Guyanese national elections in 2001. In January 2002, the presidents of Suriname and Guyana met in Suriname and agreed to resume negotiations, establishing the Suriname-Guyana border commission. In 2004 Guyana brought a complaint against Suriname under the United Nations Convention on the Law of the Sea (UNCLOS) regarding their maritime border dispute. In 2007, the UN International Tribunal on the Law of the Sea (ITLOS) ruled that both Suriname and Guyana are entitled to their share of the disputed offshore basin which is believed to be rich in oil and gas deposits. Using the equidistance line, the tribunal awarded Suriname 6,900 sq. miles and Guyana 12,800 sq. miles of this basin. Suriname's earlier dispute with Brazil ended amicably after formal demarcation of their shared border.

U.S.-SURINAMESE RELATIONS
Since the reestablishment of a democratic, elected government in 1991, the United States has maintained positive and mutually beneficial relations with Suriname based on the principles of democracy, respect for human rights, rule of law, and civilian authority over the military. To further strengthen civil society and bolster democratic institutions, the U.S. has provided training to selected Surinamese military officers and policy leaders on appropriate roles for the military in civil society and other relevant topics. To assist Suriname in the fight against drugs and associated criminal activity, the U.S. has provided support to include training Surinamese anti-drug squads, police uniform patrol, military police, and customs officials. The U.S. and Suriname also have significant partnerships in fighting trafficking in persons and money laundering.

Since 2000, the U.S. has donated a criminal records database to the police as well as computers, vehicles, and radio equipment. Projects through which the U.S. has supported the judicial system include case management and computer hardware donations. Along with training projects, these programs have led to a strong relationship with law enforcement entities in Suriname. The United States also has worked with the Surinamese Ministries of Health, Education, and Defense to execute humanitarian engineering and health projects throughout the country.

Peace Corps Suriname works with the Ministry of Regional Development, the Ministry of Health, and local and national groups to encourage healthy lifestyles and sound business practices in the interior and districts of Suriname (www.peacecorps.gov).

Suriname is densely forested, and increased interest in large-scale commercial logging and mining in Suriname's interior have raised environmental concerns. The U.S. Forest Service, the Smithsonian, and numerous non-governmental environmental organizations have promoted technical cooperation with the Surinamese Government to prevent destruction of the country's tropical rain forest, one of the most diverse ecosystems in the world. U.S. experts have worked closely with local natural resource officials to encourage sustainable development of the interior and alternatives such as ecotourism. On December 1, 2000, UNESCO designated the 1.6 million hectare Central Suriname Nature Reserve a World Heritage site. Suriname's tourism sector remains a minor part of the economy, and tourist infrastructure is limited (in 2004, some 145,000 foreign tourists visited Suriname).

Suriname's efforts in recent years to liberalize its economic policy created new possibilities for U.S. exports and investments. The U.S. remains one of Suriname's principal trading partners, largely due to ALCOA's longstanding investment in Suriname's bauxite mining and processing industry. Several U.S. corporations represented by Surinamese firms acting as dealers are active in Suriname, largely in the mining, consumer goods, and service sectors. Principal U.S. exports to Suriname include chemicals, vehicles, machine parts, meat, and wheat. U.S. consumer products are increasingly available through Suriname's many trading companies. Opportunities for U.S. exporters, service companies, and engineering firms probably will expand over the next decade.

Suriname is looking to U.S. and other foreign investors to assist in the commercial development of its vast natural resources and to help finance infrastructure improvements. In 2001 Suriname introduced and enacted an investment law. The IMF advised the government in 2003 to revise the law in order to increase its attractiveness to investors. The law was recalled for review, and provisions for new investments are available on a case-by-case basis with the permission of the Minister of Finance.

Principal U.S. Embassy Officials
Ambassador--John R. Nay
Deputy Chief of Mission--Susan Bell
Military Liaison Officer-- LCDR Waymon Jackson
Political/Economic Officer--Geneve Menscher
Management Officer--Jennifer Christenson
Consular Officer--Liza Ybarra
Police Attaché--Susan Nave
Regional Security Officer--Douglas Marvin
Peace Corps Country Director--Ann Conway

The U.S. Embassy in Paramaribo is located at Dr. Sophie Redmondstraat 129, P.O. Box 1821, Paramaribo, Suriname (tel. 597-472900, 597-476459; fax: 597- 410025).

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

Caribbean Central American Action (CCAA)
1818 N Street, NW Suite 310
Washington, DC 20036
Tel: 202-466-7464
Fax: 202-822-0075

U.S. Department of State
Bureau of Western Hemisphere Affairs
Office of Caribbean Affairs
2201 C Street, NW
Washington, DC
Tel: 202-647-4719

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.

Background Notes : Brazil (11/09)

Tue, 10 Nov 2009 09:53:57 EDT

Background Note: Brazil

November 2009

Bureau of Western Hemisphere Affairs

New Year's fireworks over a crowd of people at Copacabana beach, Rio de Janeiro, Brazil, January 1, 2006. [© AP Images]

PROFILE

OFFICIAL NAME:
Federative Republic of Brazil

Geography
Area: 8,511,965 sq. km. (3,290,000 sq. mi.); slightly smaller than the U.S.
Cities: Capital--Brasilia (pop. 2.5 million). Other cities--Sao Paulo (10.9 million), Rio de Janeiro (6.1 million), Belo Horizonte (2.4 million), Salvador (2.9 million), Fortaleza (2.4 million), Recife (1.5 million), Porto Alegre (1.4 million), Curitiba (1.8 million).
Terrain: Dense forests in northern regions including Amazon Basin; semiarid along northeast coast; mountains, hills, and rolling plains in the southwest, including Mato Grosso; midwestern savannahs; the world's largest wetland area; and coastal lowland.
Climate: Mostly tropical or semitropical with temperate zone in the south.

People
Nationality: Brazilian.
Population (2008 est.): 196 million.
Annual growth rate: 1.05%.
Ethnic groups: Portuguese, Italian, German, Spanish, Japanese, Arab, African, and indigenous people.
Religion: Roman Catholic (74%).
Language: Portuguese.
Education: Literacy--88% of adult population.
Health: Infant mortality rate--23.3/1,000. Life expectancy--72.7 years in 2008.
Work force: 99.23 million.

Government
Type: Federative republic.
Independence: September 7, 1822.
Constitution: Promulgated October 5, 1988.
Branches: Executive--president (chief of state and head of government popularly elected to no more than two 4-year terms). Legislative--Senate (81 members popularly elected to 8-year terms), Chamber of Deputies (513 members popularly elected to 4-year terms). Judicial--Supreme Federal Tribunal (11 lifetime positions appointed by the president).
Political parties: Workers' Party (PT), Brazilian Democratic Movement Party (PMDB), Brazilian Social Democratic Party (PSDB), Democrats (DEM), Democratic Workers Party (PDT), Brazilian Labor Party (PTB), Party of the Republic (PR), Brazilian Socialist Party (PSB), Communist Party of Brazil (PC do B), Progressive Party (PP). Popular Socialist Party (PPS), Green Party (PV), Socialism and Freedom Party (PSOL), the National Mobilization Party (PMN), National Workers Party (PTN), Humanistic Solidarity Party (PHS), the Brazilian Republican Party (PRB), Christian Social Party (PSC), Christian Labor Party (PTC), and the Labor Party of Brazil (PT do B).

Economy (2008)
GDP (official exchange rate): $1.573 trillion.
GDP (purchasing power parity): $1.977 trillion.
Annual real growth (2008): 5.1%.
Per capita GDP (official exchange rate): $8,300.
Per capita GDP (purchasing power parity): $9,700.
Natural resources: Iron ore, manganese, bauxite, nickel, uranium, gemstones, oil, wood, and aluminum. Brazil has 14% of the world's renewable fresh water.
Agriculture (5.8% of GDP): Products--coffee, soybeans, sugarcane, cocoa, rice, livestock, corn, oranges, cotton, wheat, and tobacco.
Industry (28.7% of GDP): Types--steel, commercial aircraft, chemicals, petrochemicals, footwear, machinery, motors, vehicles, auto parts, consumer durables, cement, and lumber.
Services (65.8% of GDP): Types--mail, telecommunications, banking, energy, commerce, and computing.
Trade: Trade balance (2008)--$24.8 billion surplus. Exports--$197.9 billion. Major markets--United States 14.0%, Argentina 8.9%, and China 8.3%. Imports--$173.1 billion. Major suppliers--United States 14.9%, China 11.6%, and Argentina 7.7%.

PEOPLE AND HISTORY
With its estimated 196 million inhabitants, Brazil has the largest population in Latin America and ranks fifth in the world. The majority of people live in the south-central area, which includes the industrial cities of Sao Paulo, Rio de Janeiro, and Belo Horizonte. Urban growth has been rapid; by 2005, 81% of the total population was living in urban areas. This growth has aided economic development but also has created serious social, security, environmental, and political problems for major cities.

Six major groups make up the Brazilian population: the Portuguese, who colonized Brazil in the 16th century; Africans brought to Brazil as slaves; various other European, Middle Eastern, and Japanese and other Asian immigrant groups who have settled in Brazil since the mid-19th century; and indigenous peoples of Tupi and Guarani language stock. Intermarriage between the Portuguese and indigenous people or slaves was common. Although the major European ethnic stock of Brazil was originally Portuguese, subsequent waves of immigration have contributed to a diverse ethnic and cultural heritage.

From 1875 until 1960, about 5 million Europeans immigrated to Brazil, settling mainly in the four southern states of Sao Paulo, Parana, Santa Catarina, and Rio Grande do Sul. Immigrants have come mainly from Italy, Germany, Spain, Japan, Poland, and the Middle East. The largest Japanese community outside Japan is in Sao Paulo. Despite class distinctions, national identity is strong, and racial friction is a relatively new phenomenon. Indigenous full-blooded Indians, located mainly in the northern and western border regions and in the upper Amazon Basin, constitute less than 1% of the population. Their numbers are declining as contact with the outside world and commercial expansion into the interior increase. Brazilian Government programs to establish reservations and to provide other forms of assistance have existed for years but are controversial and often ineffective.

Brazil is the only Portuguese-speaking nation in the Americas. About three-quarters of all Brazilians belong to the Roman Catholic Church; most others are Protestant, members of a growing evangelical movement, or follow practices derived from African religions.

Pedro Alvares Cabral claimed Brazil for Portugal in 1500. The colony was ruled from Lisbon until 1808, when Dom Joao VI and the rest of the Portuguese royal family fled from Napoleon's army, and established its seat of government in Rio de Janeiro. Dom Joao VI returned to Portugal in 1821. His son declared Brazil's independence on September 7, 1822, and became emperor with the title of Dom Pedro I. His son, Dom Pedro II, ruled from 1831 to 1889, when a federal republic was established in a coup led by Deodoro da Fonseca, Marshal of the Army. Slavery had been abolished a year earlier by the Regent Princess Isabel while Dom Pedro II was in Europe.

From 1889 to 1930, the government was a constitutional republic, with the presidency alternating between the dominant states of Sao Paulo and Minas Gerais. This period ended with a military coup that placed Getulio Vargas, a civilian, in the presidency; Vargas remained as dictator until 1945. Between 1945 and 1961, Jose Linhares, Gaspar Dutra, Vargas himself, Cafe Filho, Carlos Luz, Nereu Ramos, Juscelino Kubitschek, and Janio Quadros were elected presidents. When Quadros resigned in 1961, Vice President Joao Goulart succeeded him.

Goulart's years in office were marked by high inflation, economic stagnation, and the increasing influence of radical political elements. The armed forces, alarmed by these developments, staged a coup on March 31, 1964. The coup leaders chose as president Humberto Castello Branco, followed by Arthur da Costa e Silva (1967-69), Emilio Garrastazu Medici (1969-74), and Ernesto Geisel (1974-79), all of whom were senior army officers. Geisel began a democratic opening that was continued by his successor, Gen. Joao Baptista de Oliveira Figueiredo (1979-85). Figueiredo not only permitted the return of politicians exiled or banned from political activity during the 1960s and 1970s, but also allowed them to run for state and federal offices in 1982.

At the same time, an electoral college consisting of all members of congress and six delegates chosen from each state continued to choose the president. In January 1985, the electoral college voted Tancredo Neves from the opposition Brazilian Democratic Movement Party (PMDB) into office as President. However, Neves became ill in March and died a month later. His Vice President, former Senator Jose Sarney, became President upon Neves' death. Brazil completed its transition to a popularly elected government in 1989, when Fernando Collor de Mello won 53% of the vote in the first direct presidential election in 29 years. In 1992, a major corruption scandal led to his impeachment and ultimate resignation. Vice President Itamar Franco took his place and governed for the remainder of Collor's term culminating in the October 3, 1994 presidential elections, when Fernando Henrique Cardoso was elected President with 54% of the vote. Cardoso took office January 1, 1995, and pursued a program of ambitious economic reform. He was re-elected in October 1998 for a second four-year term. Luiz Inacio Lula da Silva, commonly known as Lula, was elected president in 2002, after his fourth campaign for the office. He was re-elected in 2006 for a second four-year term. President Lula, a former union leader, is Brazil's first working-class president. Since taking office he has taken a prudent fiscal path, warning that social reforms would take years and that Brazil had no alternative but to maintain tight fiscal austerity policies.

The next general election will be held in 2010 to elect a new president and state governors, federal and state deputies, and a portion of senators. The first round of elections is scheduled for October 3, 2010 with run-offs as necessary October 31, 2010.

GOVERNMENT AND POLITICAL CONDITIONS
Brazil is a federal republic with 26 states and a federal district. The 1988 constitution grants broad powers to the federal government, made up of executive, legislative, and judicial branches. The president holds office for four years, with the right to re-election for an additional four-year term, and appoints his own cabinet. There are 81 senators, three for each state and the Federal District, and 513 deputies. Senate terms are eight years, staggered so that two-thirds of the upper house is up for election at one time and one-third four years later. Chamber terms are four years, with elections based on a complex system of proportional representation by states. Each state is eligible for a minimum of eight seats; the largest state delegation (Sao Paulo's) is capped at 70 seats. This system is weighted in favor of geographically large but sparsely populated states.

Nineteen political parties are represented in Congress. Since it is common for politicians to switch parties, the proportion of congressional seats held by particular parties changes regularly. The major political parties are:

Workers' Party (PT-center-left)
Democrats (DEM-center-right)
Brazilian Democratic Movement Party (PMDB-center)
Brazilian Social Democratic Party (PSDB-center-left)
Progressive Party (PP-right)
Brazilian Labor Party (PTB-center-right)
Party of the Republic (PR-center-right)
Brazilian Socialist Party (PSB-left)
Popular Socialist Party (PPS-left)
Democratic Labor Party (PDT-left)
Communist Party of Brazil (PCdoB-left)

President Lula was re-elected October 29, 2006 in a second round victory with over 60% of the vote, over Geraldo Alckmin of the PSDB. Lula's PT party failed to win a majority in either the lower or upper houses in concurrent legislative elections and was obliged to form a coalition with the centrist PMDB party--which won the most seats in the lower house and ended up with the largest number in the Senate--and a collection of minor parties. However, party loyalty is weak in Brazil, and it is common for politicians to switch parties, changing the balance of power in Congress. The PT won five of twenty-seven governorships, but the opposition PSDB remains in control of the critical states of Sao Paulo and Minas Gerais. The PMDB, as in the legislative elections, won the most governorships of any one party, controlling seven states. Because of the mandatory revenue allocation to states and municipalities provided for in the 1988 constitution, Brazilian governors and mayors have exercised considerable power since 1989.

Lula's electoral victory came despite a series of corruption scandals that resulted in the resignation of senior PT officials and the electoral defeat of several congressmen from parties allied to the PT. A number of congressional investigations are ongoing, though Lula has never been linked personally to any of the scandals.

Chief of State and Cabinet Members
President--Luiz Inacio Lula da Silva
Vice President--Jose Alencar Gomes da Silva
Minister-Chief Casa Civil (Chief of Staff)--Dilma Rousseff
Minister of Defense--Nelson Jobim
Minister of Development, Industry, and Trade--Miguel Jorge Filho
Minister of Finance--Guido Mantega
Minister of Foreign Affairs--Celso Luiz Nunes Amorim
Minister of Justice--Tarso Genro
Minister of the Environment--Carlos Minc Baumfeld
Minister of Agriculture, Livestock and Food Supply--Reinhold Stephanes
Minister of Mines and Energy--Edison Lobão
Ambassador to the United States--Antonio de Aguiar Patriota
Ambassador to the United Nations--Maria Luiza Ribeiro Viotti
Ambassador to the OAS--Osmar Vladimir Chohfi

Brazil maintains an embassy in the United States at 3006 Massachusetts Avenue NW, Washington, DC 20008 (tel. 202-238-2700). Brazil has consulates general in New York, Chicago, and Los Angeles, and consulates in Miami, Houston, Boston, Atlanta, and San Francisco.

ECONOMY
President Lula and his economic team have implemented prudent fiscal and monetary policies which have been credited with helping shield Brazil from the worst of the global financial crisis of 2008 and 2009. That said, Brazil's economy has not escaped the crisis unscathed. After posting growth rates of 5.7% in 2007 and 5.1% in 2008, Brazil’s GDP dropped 0.8% in the first quarter of 2009. Several steps have been taken by the government to minimize the impact of the crisis, including injecting more than U.S. $100 billion of additional liquidity into the local economy, providing tax cuts to manufacturers, and reducing Central Bank interest rates. Growth estimates for the second half of 2009 and 2010 are positive. Brazil is now a net creditor nation, and the current crisis notwithstanding, has in recent years experienced sustained growth, strong exports, healthy external accounts, moderate inflation, decreasing unemployment, and reductions in the debt-to-GDP ratio over the last several years. In early 2008, two major rating agencies upgraded Brazil to investment-grade sovereign debt rating.

However, significant vulnerabilities remain in the Brazilian economy. The total tax burden is high, income distribution remains skewed, and the private business community complains of burdensome regulation. The global financial crisis has hampered President Lula’s efforts to accelerate economic expansion.

Brazil is generally open to and encourages foreign investment. Brazil is the largest recipient of foreign direct investment (FDI) in Latin America, and the United States is traditionally the number one foreign investor in Brazil. Since domestic savings is not sufficient to sustain long-term high growth rates, Brazil must continue to attract FDI. In order to attract increasing levels of FDI, many business groups and international organizations have highlighted the need for Brazil to improve its regulatory environment for investments and to simplify the tax code. Brazil does not have a bilateral tax or investment treaty with the United States. Legislation promoting public-private partnerships, a key effort to attract private investment to infrastructure, was passed in 2004. In 2007, the Government of Brazil initiated an ambitious infrastructure development program, known as the Growth Acceleration Program (PAC), to address the country’s significant road, rail, energy supply, and other infrastructure needs. The program has been viewed by the government as a central component of its development strategy, which it believes has also served as a countercyclical factor in cushioning Brazil’s economy from the full effects of the world financial crisis. Critics of the program say that the program is cumbersome and weighted down with too many programs and too much bureaucracy, resulting in a program that some consider ineffective.

Trade Policy
President Lula has made economic growth and poverty alleviation top priorities. Export promotion is a main component in plans to generate growth and reduce what is seen as a vulnerability to international financial market gyrations. To increase exports, the government is seeking access to foreign markets through trade negotiations and increased export promotion as well as government financing for exports.

Brazil has been a leading player in the World Trade Organization’s Doha Round negotiations and continues to seek to bring that effort to successful conclusion. To further increase its international profile (both economically and politically), the Lula administration is also seeking expanded trade ties with developing countries, as well as a strengthening of the Mercosul (Mercosur in Spanish) customs union with Uruguay, Paraguay, and Argentina. In 2004, Mercosul concluded free trade agreements with Colombia, Ecuador, Venezuela, and Peru, adding to its existing agreements with Chile and Bolivia to establish a commercial base for the newly-launched South American Community of Nations. In 2008 Mercosul concluded a free trade arrangement with Israel. Mercosul is pursuing free trade negotiations with Mexico and Canada and has resumed trade negotiations with the EU. The trade bloc also plans to launch trilateral free trade negotiations with India and South Africa, building on partial trade liberalization agreements concluded with these countries in 2004. In July 2006, Venezuela officially joined the Mercosul trade bloc; its full membership is pending ratification by the Brazilian congress. China has increased its importance as an export market for Brazilian soy, iron ore, and steel, becoming one of Brazil's principal trading partners and a potential source of investment.

Agriculture
Agriculture is a major sector of the Brazilian economy, and is key for economic growth and foreign exchange. Agriculture accounts for about 5.8% of GDP (25% when including agribusiness) and 36% of Brazilian exports. Brazil enjoyed a positive agricultural trade balance of $60 billion in 2008. Brazil is the world's largest producer of sugarcane, coffee, tropical fruits, frozen concentrated orange juice (FCOJ), and has the world's largest commercial cattle herd (50% larger than the U.S.) at 170 million head. Brazil is also an important producer of soybeans (second to the United States), corn, cotton, cocoa, tobacco, and forest products. The remainder of agricultural output is in the livestock sector, mainly the production of beef and poultry (second to the United States), pork, milk, and seafood.

Environment, Science, and Technology
About half of Brazil is covered in forests, and Brazil has the majority of the world's largest rain forest, the Amazon. In the last 30 years, migrations into the Amazon and the conversion of forest land, primarily for agricultural use, has reduced the Brazilian Amazon by almost 20%. In 2006, the government created the Brazilian Forest Service with the aim to manage in a sustainable manner the Amazon forest resources. Due to concerns over possible unauthorized taking and commercialization of genetic resources or traditional knowledge of indigenous communities (often referred to as "biopiracy"), Brazil has imposed substantial restrictions on foreign researchers collecting or studying biological materials. With the vast majority of the population living in urban areas, Brazil confronts a serious environmental challenge in providing potable water to its citizens and removing and treating their waste water.

Brazil is a leader in science and technology in South America and in some fields a global leader, such as biofuels, agricultural research, deep-sea oil production, and remote sensing. U.S. Government, private sector, and academic researchers have extensive ties with Brazilian counterparts, and the extent of bilateral scientific and technological cooperation is expanding. The Brazilian Government seeks to develop an environment that is more supportive of innovation, taking scientific advances from the laboratory to the marketplace.

Other Aspects
Brazil has one of the most advanced industrial sectors in Latin America. Accounting for one-third of GDP, Brazil's diverse industries include automobiles and parts, machinery and equipment, textiles, shoes, cement, computers, aircraft, and consumer durables. Brazil continues to be a major world supplier of commodities and natural resources, with significant operations in lumber, iron ore, tin, other minerals, and petrochemicals.

Brazil has a diverse and sophisticated services industry as well, including developed telecommunications, banking, energy, commerce, and computing sectors. The financial sector is secure and provides local firms a wide range of financial products, yet interest rates remain among the highest in the world. The largest financial firms are Brazilian (and the two largest banks are government-owned), but U.S. and other foreign firms have an important share of the market.

Government-initiated privatization after 1996 triggered a flood of investors in the telecom, energy, and transportation sectors. Privatization in the transportation sector has been particularly active over the last 20 years. Many antiquated and burdensome state management structures that operated in the sector have been dismantled, though some of them still exist. The Brazilian railroad industry has been privatized through concession contracts ranging from 30 to 60 years, and the ports sector is experiencing similar, albeit less expansive, privatization. In response to the dramatic deterioration in the national highway system, the federal government has granted concessions for existing highways to private companies, which in turn promise to restore, maintain, and expand these highways in exchange for toll revenues generated. New opportunities are expected to arise with the opening of the Brazilian civil airports to private management and investment through a federal concession model, but the initiative faces obstacles due to questions surrounding sovereignty and opposition from airport unions. The United States and Brazil signed an Air Services Liberalization Agreement in 2008 that significantly expanded air services between the two countries.

The Government of Brazil has undertaken an ambitious program to reduce dependence on imported oil. In the mid-1980s, imports accounted for more than 70% of Brazil's oil and derivatives needs; the net figure is now zero. Brazil announced in early 2008 the discovery of the Tupi and Carioca oil fields off the coast of Rio de Janeiro. The oil reserves in these fields are conservatively estimated at between 30 billion and 80 billion barrels, which would put Brazil in the top ten countries in the world by reserves. Output from the existing Campos Basin and the discovery of the new fields could make Brazil a significant oil exporter by 2015. Brazil is one of the world's leading producers of hydroelectric power. Of its total installed electricity-generation capacity of 90,000 megawatts, hydropower accounts for 66,000 megawatts (74%). Brazil is also the world’s largest biofuels exporter and sugar-based ethanol makes up over 50% of its vehicle fuel usage. Brazil and the United States, as the world’s largest biofuels producers, are working jointly through a 2007 memorandum of understanding to help make sustainable biofuels a global commodity.

Proven mineral resources are extensive. Large iron and manganese reserves are important sources of industrial raw materials and export earnings. Deposits of nickel, tin, chromite, bauxite, beryllium, copper, lead, tungsten, zinc, gold, and other minerals are exploited. High-quality, coking-grade coal required in the steel industry is in short supply.

FOREIGN RELATIONS
Brazil has traditionally been a leader in the inter-American community and played an important role in collective security efforts, as well as in economic cooperation in the Western Hemisphere. Brazil supported the Allies in both World Wars. During World War II, its expeditionary force in Italy played a key role in the Allied victory at Monte Castello. It is a member of the Organization of American States (OAS) and a party to the Inter-American Treaty of Reciprocal Assistance (Rio Treaty). Recently, Brazil has given high priority to expanding relations with its South American neighbors and is a founding member of the Latin American Integration Association (ALADI), the Union of South American Nations (UNASUL) created in June 2004, and Mercosul, a customs union between Argentina, Uruguay, Paraguay, and Brazil, with Chile, Bolivia, Peru, Colombia, and Ecuador as associate members; Venezuela's full membership is pending.

Brazil is a charter member of the United Nations and participates in its specialized agencies. It has contributed troops to UN peacekeeping efforts in the Middle East, the former Belgian Congo, Cyprus, Mozambique, Angola, East Timor, and most recently Haiti. Brazil is currently leading the UN peacekeeping force in Haiti. Brazil served as a non-permanent member of the UN Security Council from 2004-2005. Prior to this, it had been a member of the UN Security Council eight times. Brazil is lobbying for a permanent position on the Council.

As Brazil's domestic economy has grown and diversified, the country has become increasingly involved in international economic and trade policy discussions. For example, Brazil has been a leader of the G-20 group of nations and in 2009 became a creditor country to the International Monetary Fund (IMF). The U.S., Western Europe, and Japan are primary markets for Brazilian exports and sources of foreign lending and investment. China is a growing market for Brazilian exports. Brazil also has bolstered its commitment to nonproliferation through ratification of the nuclear Non-Proliferation Treaty (NPT), signing a full-scale nuclear safeguard agreement with the International Atomic Energy Agency (IAEA), acceding to the Treaty of Tlatelolco, and joining the Missile Technology Control Regime (MTCR) and the Nuclear Suppliers Group.

U.S.-BRAZILIAN RELATIONS
The United States was the first country to recognize Brazil's independence in 1822. The two countries have traditionally enjoyed friendly, active relations encompassing a broad political and economic agenda. Deepening U.S.-Brazil engagement and cooperation are reflected in high-level contacts between the two governments, including reciprocal visits by President George W. Bush and President Lula in March 2007.

Ongoing topics of discussion and cooperation include trade and finance; hemispheric economic integration; biofuels; regional security; nonproliferation and arms control; human rights and trafficking in persons; international crime, including financial support to terrorist groups; counter-narcotics; and environmental issues. Existing bilateral agreements include an Education Partnership Agreement, which enhances and expands cooperative initiatives in such areas as standards-based education reform, use of technology, and professional development of teachers; a Mutual Legal Assistance treaty--ratified in 2001; and agreements on cooperation in energy, the environment, science and technology, and transportation. In March 2007, the United States and Brazil signed three separate memoranda of understanding to increase cooperation on biofuels (MOU text; fact sheet), education (MOU; media note) and legislative capacity building in Guinea-Bissau (media note). The U.S. and Brazil are also cooperating on trilateral development programs in Mozambique in the health sector and food security, with plans to extend this cooperation to additional countries in Africa and Haiti.

Secretary of State Condoleezza Rice visited Brazil in March 2008 and signed a historic Joint Action Plan for Racial Equality. The plan calls for Brazil and the United States to work jointly in combating racial discrimination and sharing best practices in tackling discrimination in the areas of education, law enforcement, labor, health, and many other areas. On October 31, 2008, the joint action plan was officially launched with the announcement of six joint projects in the areas of education and labor. The plan is now in the implementation stage with each government engaging various members of the non-governmental organization and academic communities, as well as the private sector, to advance the plan’s objectives (MOU text; fact sheet).

U.S. Embassy and Consulate Functions
The U.S. embassy and consulates in Brazil provide a wide range of services to U.S. citizens and business. Political, economic, and science officers deal directly with the Brazilian Government in advancing U.S. interests but also are available to brief U.S. citizens on general conditions in the country. Attaches from the U.S. Commercial Service and Foreign Agriculture Service work closely with hundreds of U.S. companies that maintain offices in Brazil. These officers provide information on Brazilian trade and industry regulations and administer several programs to aid U.S. companies starting or maintaining business ventures in Brazil. The number of trade events and U.S. companies traveling to Brazil to participate in U.S. Commercial Service and Foreign Agriculture Service programs has tripled over the last three years.

The consular section of the embassy provides vital services to the estimated 60,000 U.S. citizens residing in Brazil. Among other services, the consular section assists Americans who wish to participate in U.S. elections while abroad and provides U.S. tax information. Besides the U.S. residents living in Brazil, some 150,000 U.S. citizens visit annually. The consular section offers passport and emergency services to U.S. tourists as needed during their stay in Brazil.

Principal U.S. Embassy Officials
Ambassador--vacant
Chargé d'Affaires/Deputy Chief of Mission--Lisa Kubiske
Acting Defense Attache--Colonel Frank Rindone, U.S. Army
Consul General--Marie Damour
Economic Counselor--Tara Erath
Agricultural Counselor--Alan Hrapsky
Commercial Attache--Rebecca Armand
Political Counselor--Stephen Liston
Science Counselor--Richard Driscoll
Public Affairs Counselor--Adele Ruppe
Consul General in Sao Paulo--Thomas J. White
Consul General in Rio de Janeiro--Dennis Hearne
Consul in Recife--Chris del Corso

The U.S. Embassy in Brasilia is located at SES Avenida das Nacoes, quadra 801, lote 3, Brasilia, DF, CEP: 70.403-900 (tel. 55-61-3312-7000), (fax 55-61-3225-9136). Internet: http://brasilia.usembassy.gov/.

U.S. consulates general are in Rio de Janeiro and Sao Paulo, and a consulate is in Recife. Consular agents are located in Manaus, Belem, Salvador, Fortaleza, and Porto Alegre. Branch offices of the U.S. Foreign Commercial Services are located in Brasilia, Sao Paulo, Rio de Janeiro, and Belo Horizonte.

Other Business Contacts
U.S. Department of Commerce
Office of Latin America and the Caribbean
International Trade Administration
14th and Constitution Avenue, NW
Washington, DC 20230
Tel: 202-482-0428
1-800-USA-TRADE
Fax: 202-482-4157
Automated fax service for trade-related info: 202-482-4464

American Chamber of Commerce of Sao Paulo
Rua da Paz, No. 1431
04713-001 - Chacara Santo Antonio
Sao Paulo - SP, Brazil
Tel: 55-11-51-803-804
Fax: 55-11-51-803-777
E-mail: amhost@amcham.com.br

American Chamber of Commerce of Rio de Janeiro
Praca Pio X-15, 5th Floor
Caixa Postal 916
20040 Rio de Janeiro--RJ-Brazil
Tel: 55-21-2203-2477
Fax: 55-21-2263-4477
E-mail: amchambr@unisys.com.br

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.

Background Notes : Denmark (11/09)

Wed, 18 Nov 2009 12:16:41 EDT

Background Note: Denmark

November 2009

Bureau of European and Eurasian Affairs

A replica of a Viking ship sails in the Roskilde, Denmark fjord, May 5, 2007. [© AP Images]

PROFILE

OFFICIAL NAME:
Kingdom of Denmark

Geography*
Area: 43,094 sq. km. (16,639 sq. mi.); slightly smaller than Vermont and New Hampshire combined.
Cities: Capital--Copenhagen (pop. 518,574 in Copenhagen and 1,662,189 in the Capital Region). Other cities--Aarhus (302,618), Aalborg (196,292), Odense (187,929).
Terrain: Low and flat or slightly rolling; highest elevation is 173 m. (568 ft.).
Climate: Temperate. The terrain, location, and prevailing westerly winds make the weather changeable.

*Excluding Greenland and the Faroe Islands

People
Nationality: Noun--Dane(s). Adjective--Danish.
Population (Jan. 2009): 5,511,451.
Annual growth rate (Jan. 2008-Jan. 2009): 0.65%.
Ethnic groups: Scandinavian, Inuit, Faroese, German, Turkish, Iranian, Somali.
Religion membership: Danish National Evangelical Lutheran Church 83%; Muslim about 4%. Other: Majority consisting of Protestant denominations and Roman Catholics; also 19 Muslim, 3 Jewish, 6 Buddhist, and 8 Hindu religious communities recognized by the state.
Languages: Danish, Faroese, Greenlandic (Inuit dialect), some German. English is the predominant second language.
Education: Years compulsory--9. Attendance--100%. Literacy--99%.
Health: Infant mortality rate (2008)--4/1,000. Life expectancy--men 76.26 years, women 80.70 years.
Work force (2008): 2.92 million. Employment: Industry, construction, and utilities--21%; government--35%; private services--41%; agriculture and fisheries--3%.

Government
Type: Constitutional monarchy.
Constitution: June 5, 1953.
Branches: Executive--queen (chief of state), prime minister (head of government), cabinet. Legislative--unicameral parliament (Folketing). Judicial--appointed Supreme Court.
Political parties (represented in parliament): Venstre (Liberal), Social Democratic, Konservative, Socialist People's, Social Liberal, Unity List, Danish People's, New Alliance.
Suffrage: Universal adult (18 years of age).
Administrative subdivisions: 5 regions and 98 municipalities.

Economy
GDP (2008): $342.9 billion (current prices and exchange rates, source: Statistics Denmark).
Annual growth rate (real terms, 2008.): -1.1%.
Per capita GDP (2008): $62,015 (current prices and exchange rates).
Agriculture and fisheries (2.3% of GDP, 2008): Products--meat, milk, grains, seeds, hides, fur skin, fish and shellfish.
Industry (21.8% of GDP, 2008): Types--industrial and construction equipment, food processing, electronics, chemicals, pharmaceuticals, furniture, textiles, windmills, and ships.
Natural resources: North Sea--oil and gas, fish. Greenland--fish and shrimp, potential for hydrocarbons and minerals, including zinc, lead, molybdenum, uranium, gold, platinum. The Faroe Islands--fish, potential for hydrocarbons.
Trade (2008, goods): Exports--$114.892 billion: industrial production/manufactured goods 73.0% (of which machinery and instruments were 25.5%, and fuels, chemicals, etc. 13.3%); agricultural products and others for consumption 11.8% (pork and pork products 4.3% of total export); fish and fish products 2.1%. Imports--$109.727 billion: raw materials and semi-manufactures 42.6%; consumer goods 28.6%; capital equipment 11.6%; transport equipment 8.1%; fuels 7.9%. Major trade partners, exports--Germany 17.6%, Sweden 14.5%, U.K. 8.3%, Norway 6%, U.S. 5.5%, Holland 4.4%. Major trade partners, imports--Germany 21.2%, Sweden 14.2%, Holland 6.8%, U.K. 5.2%, Norway 4.7%, U.S. 3.2%.
Official exchange rate: 5.0986 kroner=U.S. $1 (2008 average).

PEOPLE AND HISTORY
The Danes, a homogeneous Gothic-Germanic people, have inhabited Denmark since prehistoric times. Danish is the principal language. English is a required school subject, and fluency is high. A small German-speaking minority lives in southern Jutland; a mostly Inuit population inhabits Greenland; and the Faroe Islands have a Nordic population with its own language. Education is compulsory from ages seven to 16 and is free through the university level.

Although religious freedom is guaranteed, the state-supported Evangelical Lutheran Church has a membership of 83% of the population. Several other Christian denominations, as well as other major religions, find adherents in Denmark. Islam is now the second-largest religion in Denmark, with the number of Muslims in Denmark estimated at slightly more than 4% of the population.

During the Viking period (9th-11th centuries), Denmark was a great power based on the Jutland Peninsula, the Island of Zealand, and the southern part of what is now Sweden. In the early 11th century, King Canute united Denmark and England for almost 30 years.

Viking raids brought Denmark into contact with Christianity, and in the 12th century, crown and church influence increased. By the late 13th century, royal power had waned, and the nobility forced the king to grant a charter, considered Denmark's first constitution. Although the struggle between crown and nobility continued into the 14th century, Queen Margrethe I succeeded in uniting Denmark, Norway, Sweden, Finland, the Faroe Islands, Iceland, and Greenland under the Danish crown. Sweden and Finland left the union in 1520; however, Norway remained until 1814. Iceland, in a "personal union" under the king of Denmark after 1918, became independent in 1944.

The Reformation was introduced in Denmark in 1536. Denmark's provinces in today's southwestern Sweden were lost in 1658, and Norway was transferred from the Danish to the Swedish crown in 1814, following the defeat of Napoleon, with whom Denmark was allied.

The Danish liberal movement gained momentum in the 1830s, and in 1849 Denmark became a constitutional monarchy. After the war with Prussia and Austria in 1864, Denmark was forced to cede Schleswig-Holstein to Prussia and adopt a policy of neutrality. Toward the end of the 19th century, Denmark inaugurated important social and labor market reforms, laying the basis for the present welfare state.

Denmark remained neutral during World War I. Despite its declaration of neutrality at the beginning of World War II, it was invaded by the Germans in 1940 and occupied until liberated by the Allied forces in May 1945. Resistance against the Germans was sporadic until late 1943. By then better organized, the resistance movement and other volunteers undertook a successful rescue mission in which nearly the entire Jewish population of Denmark was shipped to Sweden (whose neutrality was honored by Germany). However, extensive studies are still being undertaken for the purpose of establishing a clearer picture of the degree of Danish cooperation--official and corporate--with the occupying power. Denmark became a charter member of the United Nations and was one of the original signers of the North Atlantic Treaty.

Cultural Achievements
Denmark's rich intellectual heritage has made multifaceted contributions to modern culture the world over. The discoveries of astronomer Tycho Brahe (1546-1601), geologist, anatomist, and bishop, Blessed Niels Steensen (1639-86 -- beatified in 1988 by Pope John Paul II), and the brilliant contributions of Nobel laureates Niels Bohr (1885-1962) to atomic physics and Niels Finsen (1860-1904) to medical research indicate the range of Danish scientific achievement. The fairy tales of Hans Christian Andersen (1805-75), the philosophical essays of Soeren Kierkegaard (1813-55), and the short stories of Karen Blixen (pseudonym Isak Dinesen; 1885-1962) have earned international recognition, as have the symphonies of Carl Nielsen (1865-1931). Danish applied art and industrial design have won so many awards for excellence that the term "Danish Design" has become synonymous with high quality, craftsmanship, and functionalism. Among the leading lights of architecture and design was Arne Jacobsen (1902-1971), the "father of modern Danish design." The name of Georg Jensen (1866-1935) is known worldwide for outstanding modern design in silver, and "Royal Copenhagen" is among the finest porcelains. No 'short list' of famous Danes would be complete without the entertainer and pianist Victor Borge (1909-2000), who emigrated to the United States under Nazi threat in 1940, and had a worldwide following when he died a naturalized U.S. citizen in Greenwich, Connecticut, at the age of 91.

Visitors to Denmark will discover a wealth of cultural activity. The Royal Danish Ballet specializes in the work of the great Danish choreographer August Bournonville (1805-79). Danish dancers also feature regularly on the U.S. ballet scene, notably Peter Martins as head of New York City Ballet.

The Danish Film Institute, one of the oldest in Scandinavia, offers daily public screenings of Danish and international movies in their original language and plays an active role in the maintenance and restoration of important archival prints. Over the decades, movie directors like Gabriel Axel (Babette's Feast, 1987 Oscar for Best Foreign Film), Bille August (Buster's World, 1984; Pelle the Conqueror, 1988 Oscar for Best Foreign Film; The House of the Spirits, 1993) and Lars von Trier (Breaking the Waves, 1996; Dancer in the Dark, 2000 Cannes Golden Palm; and Antichrist 2009, Nordic Council’s Film Prize 2009) have all won international acclaim. In addition, Denmark has been involved virtually from the start in development of the "Dogma film" genre, where small, hand-held digital cameras have permitted greater rapport between director and actor and given a documentary film feel to their increasingly realistic works. Besides von Trier's Dogville (2003) starring Nicole Kidman, and The Idiots (1998), The Celebration (1998 Cannes Special Jury prize) by Thomas Vinterberg, Mifune's Last Song (1999 Berlin Silver Bear award) by Soeren Kragh-Jacobsen, and Italian for Beginners (2000 Berlin Silver Bear award) by Lone Scherfig all are prime examples of the Dogma concept.

International collections of modern art enjoy unusually attractive settings at the Louisiana Museum north of Copenhagen, "Arken" south of Copenhagen, and the North Jutland Art Museum in Aalborg. The State Museum of Art and the Glyptotek, both in Copenhagen, contain masterpieces of Danish and international art. Denmark's National Museum building in central Copenhagen harbors most of the state's anthropological and archeological treasures with especially fine prehistoric and Viking Age collections; two of its finest satellite collections are the Viking Ship Museum in Roskilde west of the metropolis and the Open Air Museum in a near northern suburb where original buildings have been transported from their original locations around the country and reassembled on plots specially landscaped to evoke the original site. The Museum of Applied Art and Industrial Design in Copenhagen exhibits the best in Danish design. The world-renowned Royal Copenhagen Porcelain Factory exports worldwide. The ceramic tradition is carried on by designers such as Bjoern Wiinblad, whose whimsical creations remain as popular today as when they burst on the scene in the 1950s, and is carried on by younger talents such as Gertrude Vasegaard and Michael Geertsen.

Denmark has more than its share of impressive castles, many of which have been converted to museums. Frederiksborg Castle, on a manmade island in a lake north of Copenhagen, was restored after a catastrophic fire in the 1800s and now houses important collections in awe-inspiring splendor amidst impeccably manicured gardens. In Elsinore, Kronborg (or Hamlet's) Castle that once exacted tribute from passing ships now houses important furniture and art collections of the period, while hosting in its courtyard many touring summer productions of Shakespearean works. In Copenhagen, Rosenborg Castle houses the kingdom's crown jewels and boasts spectacular public gardens in the heart of the city.

Among today's Danish writers, probably the best-known to American readers is Peter Hoeg (Smilla's Sense of Snow; Borderliners), while the most prolific is Klaus Rifbjerg--poet, novelist, playwright, and screenwriter. Benny Andersen writes poems, short stories, and music. Poems by both writers have been translated into English by the Curbstone Press. Suzanne Broegger focuses on the changing roles of women in society. Kirsten Thorup's "Baby" won the 1980 Pegasus Prize and is printed in English by the University of Louisiana Press. The psychological thrillers of Anders Bodelsen and political thrillers by Leif Davidsen also appear in English.

In music, Hans Abrahamsen and Per Noergaard are the two most famous living composers. Abrahamsen's works have been performed by the National Symphony Orchestra in Washington, DC. Other international names are Poul Ruders, Bo Holten, and Karl Aage Rasmussen. Danes such as bass player Niels Henning Oersted Petersen have won broad international recognition, and the Copenhagen Jazz Festival held each year in July has acquired a firm place on the calendar of international jazz enthusiasts.

Cultural Policy
The Ministry of Cultural Affairs was created in 1961. Cultural life and meaningful leisure time were then and remain now subjects of debate by politicians and parliament as well as the general public. The democratization of cultural life promoted by the government's 1960s cultural policy recently has come to terms with the older "genteel culture;" broader concepts of culture now generally accepted include amateur and professional cultural, media, sports, and leisure-time activities.

Denmark's cultural policy is characterized by decentralized funding, program responsibility, and institutions. Danish cultural direction differs from that of other countries with a Ministry of Culture and a stated policy in that special laws govern each cultural field--e.g., the Theater Act of 1990 (as amended) and the Music Law of 1976 (as amended).

The Ministry of Cultural Affairs includes among its responsibilities international cultural relations; training of librarians and architects; copyright legislation; and subsidies to archives, libraries, museums, literature, music, arts and crafts, theater, and film production. During 1970-82, the Ministry also recognized protest movements and street manifestations as cultural events, because social change was viewed as an important goal of Danish cultural policy. Different governments exercise caution in moderating this policy and practice. Radio and TV broadcasting also fall under the Ministry of Culture.

Government expenditures for culture totaled just over 1.0% of the public budget in 2008 and government expenditures for culture totaled 0.33% of gross domestic product (GDP). Viewed against the government's firm objective to limit public expenditures, contributions are unlikely to increase in the future and have remained about $1.2 billion for the last couple of years. Municipal and county governments assume a relatively large share of the costs for cultural activities in their respective districts, 57% to the government’s 43%. Most support goes to libraries and archives, theater, museums, arts and crafts training, and films.

Foundations
An overview of Danish culture would not be complete without mentioning the large, private foundations that play a very important part in supporting the whole spectrum of cultural activities from supporting struggling young artists to paying for large-scale restoration work, operating museums, and supporting scientific research. Private organizations like the New Carlsberg Foundation, C.L. David’s Foundation, and the Augustinus Foundation (to mention just a few) enjoy an almost semi-public stature due to their long records of working for the public good. The downside of this is that corporate, U.S.-style sponsorship of the arts is very limited in Denmark.

GOVERNMENT
Denmark is a constitutional monarchy. Queen Margrethe II has largely ceremonial functions; probably her most significant formal power lies in her right to appoint the prime minister and cabinet ministers, who are responsible for administration of the government. However, she must consult with parliamentary leaders to determine the public's will, since the cabinet may be dismissed by a vote of no confidence in the Folketing (parliament). Cabinet members are occasionally recruited from outside the Folketing.

The 1953 constitution established a unicameral Folketing of not more than 179 members, of whom two are elected from the Faroe Islands and two from Greenland. Elections are held at least every 4 years, but the prime minister can dissolve the Folketing at any time and call for new elections. Folketing members are elected by a complicated system of proportional representation; any party receiving at least 2% of the total national vote receives representation. The result is a multiplicity of parties (eight represented in the Folketing after the November 2007 general election), none of which holds a majority. Electorate participation normally is around 80%-85%.

The judicial branch consists of 22 local courts, two high courts, several special courts (e.g., arbitration and maritime), and a Supreme Court of 15 judges appointed by the crown on the government's recommendation.

Since a structural reform of local government was passed by the Folketing in 2004 and 2005, Denmark has been divided into five regions and 98 municipalities. The regions and municipalities are both led by councils elected every four years, but only the municipal councils have the power to levy taxes. Regional councils are responsible for health services and regional development, while the municipal councils are responsible for day care, elementary schools, care for the elderly, culture, environment, and roads.

The Faroe Islands enjoy home rule and Greenland has expanded “self-rule,” with the Danish Government represented locally by high commissioners. These local governments are responsible for most domestic affairs, with foreign relations, monetary affairs, and defense falling to the Danish Government.

Principal Government Officials
Monarch--Queen Margrethe II
Prime Minister--Lars Loekke Rasmussen

Ministers
Economic and Business Affairs--Lene Espersen
Foreign Affairs--Per Stig Moeller
Finance--Claus Hjort Frederiksen
Employment and Gender Equality--Inger Stoejberg
Justice--Brian Mikkelsen
Culture--Carina Christensen
Refugees, Immigration and Integration Affairs and Ecclesiastical Affairs--Birthe R. Hornbech
Development Cooperation--Ulla Toernaes
Taxation--Kristian Jensen
Transport--Lars Barfoed
Science, Technology and Innovation--Helge Sander
Food, Agriculture and Fisheries--Eva Kjer Hansen
Defense--Soeren Gade
Climate and Energy--Connie Hedegaard
Health and Prevention--Jakob Axel Nielsen
Education and Nordic Cooperation--Bertel Haarder
Interior and Social Affairs--Karen Ellemann
Environment--Troels Lund Poulsen

Ambassador to the United States--Friis Arne Petersen
Ambassador to the United Nations--Carsten Staur

Denmark maintains an embassy at 3200 Whitehaven Street NW, Washington, DC 20008-3683 (tel. 202-234-4300). Danish consulates general are located in Chicago and New York.

POLITICAL CONDITIONS
Political life in Denmark is orderly and democratic. Political changes occur gradually through a process of consensus, and political methods and attitudes are generally moderate. Growing numbers of immigrants and refugees throughout the 1990s, and less than successful integration policies, however, have in recent years led to growing support for populist anti-immigrant sentiments in addition to several revisions of already tight immigration laws, with the latest revision taking effect August 10, 2009.

The Social Democratic Party, historically identified with a well-organized labor movement but today appealing more broadly to the middle class, held power either alone or in coalition for most of the postwar period except from 1982 to 1993. From February 1993 to November 2001, Social Democratic Party chairman Poul Nyrup Rasmussen led a series of different minority coalition governments, which all included the centrist Social Liberal Party. However, with immigration high on the November 2001 election campaign agenda, the Danish People's Party doubled its number of parliamentary seats; this was a key factor in bringing into power a new minority right-of-center coalition government led by Liberal Party chief Anders Fogh Rasmussen (no relation to Nyrup Rasmussen).

Parliamentary elections held November 13, 2007 returned the coalition to government for another term of up to four years. In April 2009, after Anders Fogh Rasmussen was elected Secretary General of NATO, he was succeeded as Prime Minister by Lars Loekke Rasmussen. The coalition consists of the Liberal Party ("Venstre") and the Konservative Party, holding 65 of the 179 seats in the Folketing, and has the parliamentary support of the Danish People's Party, holding another 25 seats. The opposition Social Democrats hold 45 seats, and the Social Liberals hold 9 seats. Addressing the costs and benefits of the Denmark's comprehensive social welfare system, restraining taxes, and immigration are among the key issues on the current domestic political agenda.

Denmark's role in the European Union (EU) remains an important political issue. Denmark emerged from two referenda (June 2, 1992 and May 18, 1993) on the Maastricht Treaty on the European Union with four exemptions (or "opt-outs"): common defense, common currency, EU citizenship, and certain aspects of legal cooperation, including law enforcement. The Amsterdam Treaty was approved in a referendum May 28, 1998, by a 55% majority. Still, the electorate's fear of losing national identity in an integrated Europe and lack of confidence in long-term stability of European economies run deep. These concerns were at the forefront of the September 28, 2000 referendum on Denmark's participation in the third phase of the Economic and Monetary Union, particularly the common currency, the euro; more than 53% voted "no," and Denmark retained its "krone" currency unit. The government and the pro-EU opposition have agreed, and Denmark has received an EU green light to maintain the four opt-outs throughout the process of approving and ratifying a new EU constitutional treaty.

Denmark's relatively quiet and neutral role in international affairs was abruptly changed on September 30, 2005, when the Danish newspaper Jyllands-Posten printed 12 caricatures of Mohammed. Islamic law prohibits any visual portrayal of Mohammed, and Muslims viewed the caricatures as offensive. Muslims worldwide were infuriated with the Danes, beginning a boycott of Danish products and burning several Danish embassies. The Danish Government during the crisis sought to defend freedom of expression even as it chastised the newspaper for insensitivity toward a religious minority. The newspaper apologized, and the Danish Government repeatedly reiterated its support for freedom of religion, but some animosity toward Denmark within the international Islamic community lingers.

ECONOMY
Denmark's industrialized market economy depends on imported raw materials and foreign trade. Within the European Union, Denmark advocates a liberal trade policy. Its standard of living is among the highest in the world. Denmark devoted 0.82% of gross national income (GNI) in 2008 to foreign aid to less developed countries, including for peace and stability purposes, refugee pre-asylum costs, and for environmental purposes in central and eastern Europe and developing countries, making Denmark one of the few countries that are contributing more than the UN goal of 0.7 % of GNI to aid.

Denmark is a net exporter of food and energy. Its principal exports are machinery, instruments, and food products. The United States is Denmark's largest non-European trading partner, accounting for 4.4% of total Danish trade in 2008. Aircraft, computers, machinery, and instruments are among the major U.S. exports to Denmark. Among major Danish exports to the United States are industrial machinery, chemical products, furniture, pharmaceuticals, canned ham and pork, windmills, and plastic toy blocks (Lego). In addition, Denmark has a significant services trade with the U.S., a major share of it stemming from Danish-controlled ships engaged in container traffic to and from the United States (notably by Maersk-Line). There were 402 U.S.-owned companies operating in Denmark in 2007.

Like the rest of the world Denmark is affected by the global economic crisis. As of October 2009, unemployment was rising and private consumption had contracted significantly. Exports had fallen dramatically, also due to the devaluation of trading partners’ currencies, especially those of Sweden, Norway, and the U.K., but exports had stabilized at about 20% below previous levels. A contraction of GDP is expected in 2009, with estimates ranging from 3% to 5%. Denmark entered recession in mid-2007 before the onset of the global economic crisis, and the slowdown has been considerable. The Danish economy contracted by 1.1% in 2008 and 5.3% in the first half of 2009. In 2008, the budget surplus was $11.79 billion. In 2009 a deficit of $668 million is expected. Unemployment is relatively low at 6.4%, but up from 3% in June 2008, and is expected to peak just under double digits in early 2011. Most local observers agree that Denmark is on the path to a slow recovery and forecast economic growth from the 3rd or 4th quarter of 2009 onward.

In addition to the global crisis, Denmark has an underlying growth problem, and is projected to have the fourth-lowest productivity growth among Organization for Economic Cooperation and Development (OECD) countries in the decade to come; it dropped from sixth to twelfth place among the richest OECD nations from 1997 to 2007. Denmark has maintained a stable currency policy since the early 1980s, with the krone formerly linked to the Deutschmark and since January 1, 1999, to the euro. Denmark meets the economic convergence criteria for participating in the third phase (a common European currency--the euro) of the European Monetary Union (EMU), but the public deficit is expected to exceed the allowed 3% of GDP in 2010. Although a referendum on EMU participation held on September 28, 2000 resulted in a firm "no" and Denmark, therefore, has not yet adopted the euro, opinion polls show a majority now in favor of EMU. Another referendum on the EMU/euro is expected, though no sooner than 2011. Danes are generally proud of their welfare safety net, which ensures that all Danes receive basic health care and need not fear real poverty. However, at present the portion of working-age Danes (16 to 66-year-olds) living mostly on government transfer payments amounts to 22.6%. The heavy load of government transfer payments burdens other parts of the system. Health care, other than for acute problems, and care for the elderly and children have suffered, while taxes remain among the highest in the world. Thirty-two percent of the labor force is employed in the public sector.

Greenland
The public sector, including publicly owned enterprises and the municipalities, plays the dominant role in Greenland's economy. A large part of government revenues comes from Danish Government grants, 57% in 2009, an important supplement of GDP. The global economic slowdown is affecting Greenland as well, and a contraction of 2% of GDP is expected for 2009. The surpluses in the public budget between 2002 and 2005 were turned to a deficit of $40 million in 2007 and 2008, and unemployment is on the rise after an extended period from 2003 onward with lower unemployment. The Greenlandic economy increased by an average of 3% to 4% annually between 1993 and 2001, the result of increasing catches and exports of shrimp, Greenland halibut, and, more recently, crabs. However, it was not until 1999 that the economy had fully recovered from an economic downturn in the early 1990s. During the last decade the Greenland Home Rule Government (GHRG) has pursued a fiscal policy with mostly small budget surpluses and low inflation, but increased public pressure for improved public services in the form of better schools, health care, and retirement schemes have strained the public budget. The GHRG has taken initiatives to increase the labor force and thus employment by, among other things, raising the retirement age from 60 to 63 years. The average unemployment rate for 2008 was 4.5%. Structural reforms are still needed in order to create a broader business base and economic growth through more efficient use of existing resources in both the public and the private sector.

Due to its continued dependence on exports of fish, 85% of goods exports, Greenland’s economy remains very sensitive to foreign developments. Greenland has registered a foreign trade deficit since the closure of the last remaining lead and zinc mine in 1989, though international interest in Greenland’s mineral wealth is increasing. The trade deficit reached 12% of GDP in 2007. International consortia are also increasingly active in exploring for hydrocarbon resources off Greenland’s western coast, and there are international studies indicating the potential of oil and gas fields in northern and northeastern Greenland. The U.S. aluminum producer Alcoa in May 2007 concluded a memorandum of understanding with the Greenland Home Rule Government to build an aluminum smelter and associated power generation facility in Greenland to take advantage of abundant hydropower potential. Tourism also offers another avenue of economic growth for Greenland, with increasing numbers of cruise lines now operating in Greenland’s western and southern waters during the peak summer tourism season.

Politically, the Greenland Home Rule Government has sought increasing autonomy since the acquisition of home rule in 1979. In May 2003, the Danish and Greenland Home Rule governments reached agreement on a set of power-sharing principles on Greenland's involvement in Danish foreign and security policy. The so-called Itilleq Declaration provides that Greenland will have foreign policy involvement with a view toward having equal status on questions of concern to both Denmark and Greenland. A Danish-Greenlandic Commission, established in 2005 with the aim of preparing measures that would grant Greenland additional autonomy, issued its recommendations in early 2008 and set the conditions for a new legal framework, “Self Rule,” between Greenland and Denmark. The Self Rule agreement was overwhelmingly approved by Greenlandic voters in a referendum in November 2008 and was passed by the Danish parliament; it entered into effect on the 30th anniversary of Greenlandic Home Rule in June 2009. The new Self Rule agreement allows for the transfer of additional authorities, such as justice and police affairs, to Greenland’s government as it is able to assume financial responsibility for these new portfolios. The Self Rule agreement also provides formal international legal recognition to the Greenlanders as a people under international law, and provides a formula for division of potential oil and gas revenues between Denmark and Greenland.

Faroe Islands
In early 2008 signs of an impending slowdown in the Faroese economy became apparent. The main difficulty lay with the fishing industry coming under pressure from smaller catches combined with historically high oil prices. Though oil prices have come down, reduced catches of especially cod and haddock have strained the Faroese economy. GDP growth was 0.5% in 2007-2008, but inflation was 4.7%, leading to a drop in real GDP. A contraction in all sectors except the public sector is expected for 2009. The slowdown in the Faroese economy follows a strong performance since the mid-1990s, with annual growth rates averaging close to 6%, mostly as a result of increasing fish landings and salmon farming and high and stable export prices. Unemployment was insignificant and reached its lowest level at 1.2% in the first half of 2008 but increased to 3.3% in April 2009 and is rising. Most of the Faroese who emigrated in the early 1990s (some 10% of the population) due to the economic recession have returned. The positive economic development helped the Faroese Home Rule Government produce increasing budget surpluses that in turn helped to reduce the large public debt, most of it to Denmark. However, the total dependence on fishing and salmon farming makes the Faroese economy very vulnerable, and the surpluses turned to deficits in 2008; a deficit of $100 million is projected for 2009. Initial discoveries of oil in the Faroese area give hope for eventual oil production, which may lay the basis for a more diversified economy and thus less dependence on Denmark and Danish economic assistance. Aided by an annual subsidy from Denmark corresponding to about 6% of Faroese GDP, the Faroese have a standard of living comparable to that of the Danes and other Scandinavians.

Politically, the present Faroese Home Rule Government has initiated a process toward greater independence from Denmark, if not complete secession from the realm. In that respect, agreement on how to phase out the Danish subsidy plays a crucial role.

NATIONAL SECURITY
Although Denmark remained neutral during the First World War, its rapid occupation by Nazi Germany in 1940 persuaded most Danes that neutrality was no longer a reliable guarantee of Danish security. Danish security policy is founded on its membership in NATO. Since 1988, Danish budgets and security policy have been set by multi-year agreements supported by a wide parliamentary majority, including government and opposition parties. In 2008, Danish defense expenditures were 2.6% of GDP.

Denmark has been a member of NATO since its founding in 1949, and membership in NATO remains highly popular. There were several serious confrontations between the U.S. and Denmark on security policy in the so-called "footnote era" (1982-88), when a parliamentary majority forced the government to adopt specific national positions on nuclear and arms control issues that were at variance with Alliance policy. With the end of the Cold War, however, Denmark has been an active and supportive member of the Alliance.

FOREIGN RELATIONS
Danish foreign policy is founded upon four cornerstones: the United Nations, NATO, the EU, and Nordic cooperation. Denmark also is a member of, among other organizations, the World Bank and the International Monetary Fund; the World Trade Organization (WTO); the Organization for Security and Cooperation in Europe (OSCE); the Organization for Economic Cooperation and Development (OECD); the Council of Europe; the Nordic Council; the Baltic Council; and the Barents Council. Denmark emphasizes its relations with developing nations. Although the government has moved to tighten foreign assistance expenditures, it remains a significant donor and one of the few countries to exceed the UN goal of contributing 0.7% of GNP to development assistance.

In the wake of the Cold War, Denmark has been active in international efforts to integrate the countries of Central and Eastern Europe into the West. It has played a leadership role in coordinating Western assistance to the Baltic states (Estonia, Latvia, and Lithuania). The country is a strong supporter of international peacekeeping. Danish forces were heavily engaged in the former Yugoslavia in the UN Protection Force (UNPROFOR), as well as in NATO's Operation Joint Endeavor/Stabilization Force in Bosnia and Herzegovina (IFOR/SFOR), and currently in the Kosovo Force (KFOR).

Danes have at times had a reputation as "reluctant" Europeans. When they rejected ratification of the Maastricht Treaty on June 2, 1992, they put the European Community's (EC) plans for the European Union on hold. In December 1992, the rest of the EC agreed to exempt Denmark from certain aspects of the European Union, including a common defense, a common currency, EU citizenship, and certain aspects of legal cooperation. On this revised basis, a clear majority of Danes approved continued participation in the EU in a second referendum on May 18, 1993, and again in a referendum on the Amsterdam Treaty on May 28, 1998. Denmark has, however, at times also shown strong leadership within the European Union, as it did during its 2002 European Union presidency, when Denmark took a lead role in successful negotiations for the EU’s inclusion of 10 new members from Central and Eastern Europe.

Since the September 11, 2001 terrorist attacks in the United States, Denmark has been highly proactive in endorsing and implementing United States, UN, and EU-initiated counter-terrorism measures, just as Denmark has contributed substantially to NATO’s International Security Assistance Force (ISAF) in Afghanistan. It currently has about 750 soldiers in Afghanistan, operating without caveat and concentrated in Helmand province. In 2003, Denmark was among the first countries to join Operation Iraqi Freedom (OIF), supplying a submarine, a Corvette-class ship, and military personnel to support OIF’s coalition in Iraq. Denmark in the end provided 500 troops to assist with stabilization efforts in Iraq. Denmark withdrew most of its troops from Iraq in August 2007, when Iraqi forces took over security responsibilities in the Basra area where Danish troops had been concentrated. Denmark maintains a small residual troop contingent that supports the NATO Training Mission in Iraq.

U.S.-DANISH RELATIONS
Denmark and the United States have long enjoyed a close and mutually beneficial relationship. Denmark and the United States consult closely on European and other regional political and security matters and cooperate extensively to promote peace and stability well beyond Europe’s borders. Denmark largely shares U.S. views on the positive ramifications of NATO enlargement. Danish troops support ISAF-led stabilization efforts in Afghanistan. President George W. Bush made an official working visit to Copenhagen in July 2005, and Prime Minister Anders Fogh Rasmussen also met with President Bush at Camp David in June 2006 and in Crawford, Texas in March 2008. President Barack Obama met with Prime Minister Lars Loekke Rasmussen on October 2, 2009 in Copenhagen.

Denmark's active liberal trade policy in the EU, OECD, and WTO largely coincides with U.S. interests. There are differences of opinion between the U.S. and the EU on how to manage and resolve the global crisis, but not on the importance of action. The U.S. is Denmark's largest non-European trade partner with about 4.4% of Danish merchandise trade. Denmark's role in European environmental and agricultural issues and its strategic location at the entrance to the Baltic Sea have made Copenhagen a center for U.S. agencies and the private sector dealing with the Nordic/Baltic region.

American culture--and particularly popular culture, from jazz, rock, and rap to television shows and literature--is very popular in Denmark. More than 300,000 U.S. tourists visit Denmark annually.

The U.S. Air Force (USAF) base and early warning radar facility at Thule, in northwest Greenland, serves as a vital link in Western and NATO defenses. In August 2004, the Danish and Greenland Home Rule governments signed agreements allowing for an upgrade of the Thule early warning radar in connection with a role in the U.S. ballistic missile defense system. The same agreements also created new opportunities for both sides to enhance economic, technical, and environmental cooperation between the United States and Greenland.

Principal U.S. Officials
Ambassador--Laurie S. Fulton
Deputy Chief of Mission--Terence P. McCulley
Ambassador OMS--Christine Kucera
DCM OMS--Sue A. Myers
Political/Economic Counselor--Richard Bell
Economic Officer--Shawn Waddoups
Political Officer--Edward Messmer
Public Affairs Officer--Melissa Ford
Consul--Robert Jachim
Management Officer--Sarah Hall
Environment, Science, Technology, and Health Officer--Erik Hall
Agricultural Attaché--Steve Huete (resident in The Hague)
Senior Commercial Officer--Frank Carrico (resident in Stockholm)
Defense Attaché--Capt. Christopher McDonald, USN
Army Attaché--Lt. Col. Catherine Gillund, USA
Air Attaché--Lt. Col. Barbara East, USAF
Office of Defense Cooperation--Col. Clifford Puckett, USAF
Drug Enforcement Administration--Timothy Moran
Department of Homeland Security (ICE)--James MacDowell
Regional Security Officer--Jeff Howard
Legal Attaché--Gregory Cox

The U.S. Embassy is located at Dag Hammarskjolds Alle 24, 2100 Copenhagen Ø, Denmark (tel. +45 33-41-71-00). The website contains links to U.S. Government agencies at the Embassy and provides a wealth of information on U.S.-Danish relations.

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.

Background Notes : South Africa (11/09)

Thu, 12 Nov 2009 15:27:47 EDT

Background Note: South Africa

November 2009

Bureau of African Affairs

Antelope graze in Amakhala Game Reserve, South Africa, July 27, 2005. [© AP Images]

PROFILE

OFFICIAL NAME:
Republic of South Africa

Geography
Area: 1.2 million sq. km. (470,462 sq. mi.).
Cities: Capitals--administrative, Pretoria; legislative, Cape Town; judicial, Bloemfontein. Other cities--Johannesburg, Durban, Port Elizabeth.
Terrain: Plateau, savanna, desert, mountains, coastal plains.
Climate: moderate; similar to southern California.

People
Nationality: Noun and adjective--South African(s).
Annual growth rate (2006 World Bank Group): 1.1%.
Population (2007, 47.9 million): Composition--black 79.7%; white 9.1%; colored 8.8%; Asian (Indian) 2.2%. Official figures from 2007 South African Census at http://www.statssa.gov.za.
Languages: Afrikaans, English, isiNdebele, isiXhosa, isiZulu, Sepedi, Sesotho, Setswana, siSwati, Tshivenda, and Xitsonga (all official languages).
Religions: Predominantly Christian; traditional African, Hindu, Muslim, Jewish.
Education: Years compulsory--7-15 years of age for all children. The South African Schools Act, Act 84 of 1996, passed by Parliament in 1996, aims to achieve greater educational opportunities for black children, mandating a single syllabus and more equitable funding for schools.
Health: Infant mortality rate (2007)--58 per 1,000 live births. Life expectancy--52 yrs. women; 49 yrs. men. Health data from 2007 Census Report: http://www.statssa.gov.za.

Government
Type: Parliamentary democracy.
Independence: The Union of South Africa was created on May 31, 1910; became a sovereign state within British Empire in 1934; became a republic on May 31, 1961; left the Commonwealth in October 1968; rejoined the Commonwealth in June 1994.
Constitution: Entered into force February 3, 1997.
Branches: Executive--president (chief of state) elected to a 5-year term by the National Assembly. Legislative--bicameral Parliament consisting of 490 members in two chambers. National Assembly (400 members) elected by a system of proportional representation. National Council of Provinces consisting of 90 delegates (10 from each province) and 10 nonvoting delegates representing local government. Judicial--Constitutional Court interprets and decides constitutional issues; Supreme Court of Appeal is the highest court for interpreting and deciding nonconstitutional matters.
Administrative subdivisions: Nine provinces: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Mpumalanga, North-West, Northern Cape, Limpopo, Western Cape.
Political parties: African National Congress (ANC), Democratic Alliance (DA), Congress of the People (COPE), Inkatha Freedom Party (IFP), Vryheidsfront Plus/Freedom Front Plus (FF+), Pan-African Congress (PAC), African Christian Democratic Party (ACDP), United Democratic Movement (UDM), and Azanian Peoples Organization (Azapo).
Suffrage: Citizens and permanent residents 18 and older.

Economy
GDP (2008): $277 billion.
Real GDP growth rate (2008): 3.1%.
GDP per capita (2008): $5,684.
Unemployment (fourth quarter 2008): 21.9%.
Natural resources: Almost all essential commodities, except petroleum products and bauxite. It is the only country in the world that manufactures fuel from coal.
Industry: Types--minerals, mining, motor vehicles and parts, machinery, textiles, chemicals, fertilizer, information technology, electronics, other manufacturing, and agro-processing.
Trade (2008): Exports--$79.5 billion; merchandise exports: minerals and metals, motor vehicles and parts, agricultural products. Major markets--Japan, U.S., Germany, China, U.K., Sub-Saharan Africa. Imports--$88.2 billion: machinery, transport equipment, chemicals, petroleum products, textiles, and scientific instruments. Major suppliers--Germany, China, U.S., Saudi Arabia, Japan.
GDP composition (2008): Agriculture and mining (primary sector)--8%; industry (secondary sector)--21%; services (tertiary sector)--71%. World's largest producer of platinum, gold, and chromium; also significant coal production.

PEOPLE
Until 1991, South African law divided the population into four major racial categories: Africans (black), whites, coloreds, and Asians. Although this law has been abolished, many South Africans still view themselves and each other according to these categories. Black Africans comprise about 80% of the population and are divided into a number of different ethnic groups. Whites comprise just over 9% of the population. They are primarily descendants of Dutch, French, English, and German settlers who began arriving at the Cape of Good Hope in the late 17th century. Coloreds are mixed-race people primarily descending from the earliest settlers and the indigenous peoples. They comprise about 9% of the total population. Asians are descended from Indian workers brought to South Africa in the mid-19th century to work on the sugar estates in Natal. They constitute about 2.2% of the population and are concentrated in the KwaZulu-Natal Province.

Education is in transition. Under the apartheid system schools were segregated, and the quantity and quality of education varied significantly across racial groups. The laws governing this segregation have been abolished. The long and arduous process of restructuring the country's educational system is ongoing. The challenge is to create a single, nondiscriminatory, nonracial system that offers the same standards of education to all people.

HISTORY
People have inhabited southern Africa for thousands of years. Members of the Khoisan language groups are the oldest surviving inhabitants of the land, but only a few are left in South Africa today--and they are located in the western sections. Most of today's black South Africans belong to the Bantu language group, which migrated south from central Africa, settling in the Transvaal region sometime before AD 100. The Nguni, ancestors of the Zulu and Xhosa, occupied most of the eastern coast by 1500.

The Portuguese were the first Europeans to reach the Cape of Good Hope, arriving in 1488. However, permanent white settlement did not begin until 1652 when the Dutch East India Company established a provisioning station on the Cape. In subsequent decades, French Huguenot refugees, the Dutch, and Germans began to settle in the Cape. Collectively, they form the Afrikaner segment of today's population. The establishment of these settlements had far-reaching social and political effects on the groups already settled in the area, leading to upheaval in these societies and the subjugation of their people.

By 1779, European settlements extended throughout the southern part of the Cape and east toward the Great Fish River. It was here that Dutch authorities and the Xhosa fought the first frontier war. The British gained control of the Cape of Good Hope at the end of the 18th century. Subsequent British settlement and rule marked the beginning of a long conflict between the Afrikaners and the English.

Beginning in 1836, partly to escape British rule and cultural hegemony and partly out of resentment at the recent abolition of slavery, many Afrikaner farmers (Boers) undertook a northern migration that became known as the "Great Trek." This movement brought them into contact and conflict with African groups in the area, the most formidable of which were the Zulus. Under their powerful leader, Shaka (1787-1828), the Zulus conquered most of the territory between the Drakensberg Mountains and the sea (now KwaZulu-Natal).

In 1828, Shaka was assassinated and replaced by his half-brother Dingane. In 1838, Dingane was defeated and deported by the Voortrekkers (people of the Great Trek) at the battle of Blood River. The Zulus, nonetheless, remained a potent force, defeating the British in the historic battle of Isandhlwana before themselves being finally conquered in 1879.

In 1852 and 1854, the independent Boer Republics of the Transvaal and Orange Free State were created. Relations between the republics and the British Government were strained. The discovery of diamonds at Kimberley in 1870 and the discovery of large gold deposits in the Witwatersrand region of the Transvaal in 1886 caused an influx of European (mainly British) immigration and investment. In addition to resident black Africans, many blacks from neighboring countries also moved into the area to work in the mines. The construction by mine owners of hostels to house and control their workers set patterns that later extended throughout the region.

Boer reactions to this influx and British political intrigues led to the Anglo-Boer Wars of 1880-81 and 1899-1902. British forces prevailed in the latter conflict, and the republics were incorporated into the British Empire. In May 1910, the two republics and the British colonies of the Cape and Natal formed the Union of South Africa, a self-governing dominion of the British Empire. The Union's constitution kept all political power in the hands of whites.

In 1912, the South Africa Native National Congress was founded in Bloemfontein and eventually became known as the African National Congress (ANC). Its goals were the elimination of restrictions based on color and the enfranchisement of and parliamentary representation for blacks. Despite these efforts the government continued to pass laws limiting the rights and freedoms of blacks.

In 1948, the National Party (NP) won the all-white elections and began passing legislation codifying and enforcing an even stricter policy of white domination and racial separation known as "apartheid" (separateness). In the early 1960s, following a protest in Sharpeville in which 69 protesters were killed by police and 180 injured, the ANC and Pan-African Congress (PAC) were banned. Nelson Mandela and many other anti-apartheid leaders were convicted and imprisoned on charges of treason.

The ANC and PAC were forced underground and fought apartheid through guerrilla warfare and sabotage. In May 1961, South Africa abandoned its British dominion status and declared itself a republic. It withdrew from the Commonwealth in part because of international protests against apartheid. In 1984, a new constitution came into effect in which whites allowed coloreds and Asians a limited role in the national government and control over their own affairs in certain areas. Ultimately, however, all power remained in white hands. Blacks remained effectively disenfranchised.

Popular uprisings in black and colored townships in 1976 and 1985 helped to convince some NP members of the need for change. Secret discussions between those members and Nelson Mandela began in 1986. In February 1990, State President F.W. de Klerk, who had come to power in September 1989, announced the unbanning of the ANC, the PAC, and all other anti-apartheid groups. Two weeks later, Nelson Mandela was released from prison.

In 1991, the Group Areas Act, Land Acts, and the Population Registration Act--the last of the so-called "pillars of apartheid"--were abolished. A long series of negotiations ensued, resulting in a new constitution promulgated into law in December 1993. The country's first nonracial elections were held on April 26-28, 1994, resulting in the installation of Nelson Mandela as President on May 10, 1994.

Following the 1994 elections, South Africa was governed under an interim constitution establishing a Government of National Unity (GNU). This constitution required the Constitutional Assembly (CA) to draft and approve a permanent constitution by May 9, 1996. After review by the Constitutional Court and intensive negotiations within the CA, the Constitutional Court certified a revised draft on December 2, 1996. President Mandela signed the new constitution into law on December 10, and it entered into force on February 3, 1997. The GNU ostensibly remained in effect until the 1999 national elections. The parties originally comprising the GNU--the ANC, the NP, and the Inkatha Freedom Party (IFP)--shared executive power. On June 30, 1996, the NP withdrew from the GNU to become part of the opposition.

During Nelson Mandela's 5-year term as President of South Africa, the government committed itself to reforming the country. The ANC-led government focused on social issues that were neglected during the apartheid era such as unemployment, housing shortages, and crime. Mandela's administration began to reintroduce South Africa into the global economy by implementing a market-driven economic plan known as Growth, Employment and Redistribution (GEAR). In order to heal the wounds created by apartheid, the government created the Truth and Reconciliation Commission (TRC) under the leadership of Archbishop Desmond Tutu. During the first term of the ANC's post-apartheid rule, President Mandela concentrated on national reconciliation, seeking to forge a single South African identity and sense of purpose among a diverse and splintered populace, after years of conflict. The diminution of political violence after 1994 and its virtual disappearance by 1996 were testament to the abilities of Mandela to achieve this difficult goal.

Nelson Mandela stepped down as President of the ANC at the party's national congress in December 1997, when Thabo Mbeki assumed the mantle of leadership. Mbeki won the presidency of South Africa after national elections in 1999, when the ANC won just shy of a two-thirds majority in Parliament. President Mbeki shifted the focus of government from reconciliation to transformation, particularly on the economic front. With political transformation and the foundation of a strong democratic system in place after two free and fair national elections, the ANC recognized the need to focus on bringing economic power to the black majority in South Africa. In April 2004, the ANC won nearly 70% of the national vote, and Mbeki was reelected for his second 5-year term. In his 2004 State of the Nation address, Mbeki promised his government would reduce poverty, stimulate economic growth, and fight crime. Mbeki said that the government would play a more prominent role in economic development. Despite the fact that he was prevented by term limits from running for a third term as State President, Mbeki ran for a third term as ANC chair in party elections in December 2007. He was defeated by former Deputy President Jacob Zuma, an ANC stalwart with a populist following, a result that signaled widespread dissatisfaction with Mbeki's remote personality and governing style, and his government's failure to adequately address poverty and other development issues. On September 20, 2008, Mbeki was "recalled" by the ANC and replaced by Kgalema Motlanthe as President on September 25. Motlanthe served out the remainder of Mbeki's term and South Africa held its fourth democratic election on April 22, 2009. The ANC won with 65% of the vote followed by the Democratic Alliance (DA) with 16% of the vote. The DA also won power in the Western Cape, which became the only province that the ANC does not govern. The newly formed Congress of the People, launched by ANC members angered at the firing of Mbeki, won 9% of the vote.

GOVERNMENT AND POLITICAL CONDITIONS
South Africa is a multiparty parliamentary democracy in which constitutional power is shared between the president and the Parliament.

The Parliament consists of two houses, the National Assembly and the National Council of Provinces, which are responsible for drafting the laws of the republic. The National Assembly also has specific control over bills relating to monetary matters. The current 400-member National Assembly was retained under the 1997 constitution, although the constitution allows for a range of between 350 and 400 members. The Assembly is elected by a system of "list proportional representation." Each of the parties appearing on the ballot submits a rank-ordered list of candidates. The voters then cast their ballots for a party.

Seats in the Assembly are allocated based on the percentage of votes each party receives. In the 2009 election, the ANC won 264 seats in the Assembly, just shy of a two-thirds majority and a decrease of 33 seats from 2004; the Democratic Alliance (DA) won 67, the newly formed Congress of the People (COPE) won 30, and the IFP won 18. Smaller parties won the remaining 21 seats.

The National Council of Provinces (NCOP) consists of 90 members, 10 from each of the nine provinces. The NCOP replaced the former Senate as the second chamber of Parliament and was created to give a greater voice to provincial interests. It must approve legislation that involves shared national and provincial competencies as defined by an annex to the constitution. Each provincial delegation consists of six permanent and four rotating delegates.

The president is the head of state, and is elected by the National Assembly from among its members. Following the April 14, 2004 elections, the Assembly reelected Thabo Mbeki as President. The president's constitutional responsibilities include assigning cabinet portfolios, signing bills into law, and serving as commander in chief of the military. The president works closely with the deputy president and the cabinet. On June 14, 2005, President Mbeki informed the South African Parliament that then-Deputy President Jacob Zuma was being "released" from his duties following the conviction of a close associate on corruption charges relating to monetary payments to Zuma. On June 22, Mbeki named former Minister for Minerals and Energy Phumzile Mlambo-Ngcuka to the position of Deputy President, the first woman to hold this office.

On December 18, 2007, the African National Congress elected Jacob Zuma to the post of ANC President after a hard-fought campaign between Zuma and Thabo Mbeki, who was seeking an unprecedented third term as party president. Despite Zuma’s victory, Mbeki remained the country's President until September 2008, following a shake-up and internecine purge that displaced pro-Mbeki officers and allies in the Parliament, the government, and the party. The composition of the ANC National Executive Committee (NEC) membership shifted profoundly, replacing Mbeki’s allies with Zuma’s supporters. Following a September 2008 court judgment in Zuma’s long-running corruption trial, the judge suggested that it was possible that Zuma was a victim of an Mbeki-led political conspiracy and persecution in the form of a criminal prosecution. Within two weeks after the ruling, the pro-Zuma NEC demanded Mbeki step down as President, and ANC Deputy President Kgalema Motlanthe was elevated to the presidency as a seven-month caretaker. Zuma took over the presidency, with Motlanthe as his deputy, following the ANC’s win in the April 22, 2009 national election. The third arm of the central government is an independent judiciary. The Constitutional Court is the highest court for interpreting and deciding constitutional issues, while the Supreme Court of Appeal is the highest court for nonconstitutional matters. Most cases are heard in the extensive system of High Courts and Magistrates Courts. The constitution's bill of rights provides for due process including the right to a fair, public trial within a reasonable time of being charged and the right to appeal to a higher court. The bill of rights also guarantees fundamental political and social rights of South Africa's citizens.

Challenges Ahead
South Africa's post-apartheid governments have made remarkable progress in consolidating the nation's peaceful transition to democracy. Programs to improve the delivery of essential social services to the majority of the population are underway. Access to better opportunities in education and business is becoming more widespread. Nevertheless, transforming South Africa's society to remove the legacy of apartheid will be a long-term process requiring the sustained commitment of the leaders and people of the nation's disparate groups.

The Truth and Reconciliation Commission (TRC), chaired by 1984 Nobel Peace Prize winner Archbishop Desmond Tutu, helped to advance the reconciliation process. Constituted in 1995 and having completed its work by 2001, the TRC was empowered to investigate apartheid-era human rights abuses committed between 1960 and May 10, 1994; to grant amnesty to those who committed politically motivated crimes; and to recommend compensation to victims of abuses. In November 2003, the government began allocation of $4,600 (R30,000) reparations to individual apartheid victims. The TRC's mandate was part of the larger process of reconciling the often conflicting political, economic, and cultural interests held by the many peoples that make up South Africa's diverse population. The ability of the government and people to agree on many basic questions of how to order the country's society will remain a critical challenge.

One important issue continues to be the relationship of provincial and local administrative structures to the national government. Prior to April 27, 1994, South Africa was divided into four provinces and 10 black "homelands," four of which were considered independent by the South African Government. Both the interim constitution and the 1997 constitution abolished this system and substituted nine provinces. Each province has an elected legislature and chief executive--the provincial premier. Although in form a federal system, in practice the nature of the relationship between the central and provincial governments continues to be the subject of considerable debate, particularly among groups desiring a greater measure of autonomy from the central government. A key step in defining the relationship came in 1997 when provincial governments were given more than half of central government funding and permitted to develop and manage their own budgets. Although South Africa's economy is in many areas highly developed, the exclusionary nature of apartheid and distortions caused in part by the country's international isolation until the 1990s have left major weaknesses. The economy is in a process of transition as the government seeks to address the inequities of apartheid, stimulate growth, and create jobs. Business, meanwhile, is becoming more integrated into the international system, and foreign investment has increased. Still, the economic disparities between population groups are expected to persist for many years, remaining an area of priority attention for the government.

Human Rights
The 1997 constitution's bill of rights provides extensive guarantees, including equality before the law and prohibitions against discrimination; the right to life, privacy, property, and freedom and security of the person; prohibition against slavery and forced labor; and freedom of speech, religion, assembly, and association. The legal rights of criminal suspects also are enumerated, as are citizens' entitlements to a safe environment, housing, education, and health care. The constitution provides for an independent and impartial judiciary, and, in practice, these provisions are respected.

Since the abolition of apartheid, levels of political violence in South Africa have dropped dramatically. Violent crime and organized criminal activity are at high levels and are a grave concern. Partly as a result, vigilante action and mob justice sometimes occur.

Some members of the police commit abuses, and deaths in police custody as a result of excessive force remain a problem. The government has taken action to investigate and punish some of those who commit such abuses. In April 1997, the government established an Independent Complaints Directorate to investigate deaths in police custody and deaths resulting from police action.

Although South Africa's society is undergoing a rapid transformation, some discrimination against women continues, and discrimination against those living with HIV/AIDS remains. Violence against women and children also is a serious problem.

Principal Government Officials
State President – Jacob Zuma
Executive Deputy President – Kgalema Motlanthe

Minister of Agriculture, Forestry and Fisheries - Tina Joemat-Pettersson
Minister of Arts and Culture - Lulu Xingwana
Minister of Basic Education - Angie Motshekga
Minister of Communications - Siphiwe Nyanda
Minister of Cooperative Governance and Traditional Affairs - Sicelo Shiceka
Minister of Correctional Services - Nosiviwe Mapisa-Nqakula
Minister of Defence and Military Veterans - Lindiwe Sisulu
Minister of Economic Development - Ebrahim Patel
Minister of Energy - Dipuo Peters
Minister of Finance - Pravin Gordhan
Minister of Health - Aaron Motsoaledi
Minister of Higher Education and Training - Blade Nzimande
Minister of Home Affairs - Nkosazana Dlamini-Zuma
Minister of Human Settlements - Tokyo Sexwale
Minister of International Relations and Cooperation - Maite Nkoana-Mashabane
Minister of Justice and Constitutional Development - Jeff Radebe
Minister of Labour - Membathisi Mdladlana
Minister of Mining - Susan Shabangu
Minister of Police - Nathi Mthethwa
Minister of Public Enterprises - Barbara Hogan
Minister for the Public Service and Administration - Richard Baloyi
Minister of Public Works - Geoff Doidge
Minister of Rural Development and Land Reform - Gugile Nkwinti
Minister of Science and Technology - Naledi Pandor
Minister of Social Development - Edna Molewa
Minister of Sport and Recreation - Makhenkesi Stofile
Minister of State Security - Siyabonga Cwele
Minister in The Presidency for National Planning Commission - Trevor Manuel
Minister in The Presidency for Performance Monitoring and Evaluation - Collins Chabane
Minister of Tourism - Marthinus van Schalkwyk
Minister of Trade and Industry - Rob Davies
Minister of Transport - Sbusiso Joel Ndebele
Minister of Water and Environmental Affairs - Buyelwa Sonjica
Minister of Women, Youth, Children and People with Disabilities - Noluthando Mayende-Sibiya

The Republic of South Africa maintains an embassy in the United States at 3051 Massachusetts Avenue NW, Washington, DC 20008; tel. (202) 232-4400.

ECONOMY
South Africa has a two-tiered economy; one rivaling other developed countries and the other with only the most basic infrastructure. It therefore is a productive and industrialized economy that exhibits many characteristics associated with developing countries, including a division of labor between formal and informal sectors, and uneven distribution of wealth and income. The formal sector, based on mining, manufacturing, services, and agriculture, is well developed.

The transition to a democratic, nonracial government, begun in early 1990, stimulated a debate on the direction of economic policies to achieve sustained economic growth while at the same time redressing the socioeconomic disparities created by apartheid. The Government of National Unity's initial blueprint to address this problem was the Reconstruction and Development Program (RDP). The RDP was designed to create programs to improve the standard of living for the majority of the population by providing housing--a planned 1 million new homes in 5 years--basic services, education, and health care. While a specific "ministry" for the RDP no longer exists, a number of government ministries and offices are charged with supporting RDP programs and goals.

The Government of South Africa demonstrated its commitment to open markets, privatization, and a favorable investment climate with its release of the crucial Growth, Employment and Redistribution (GEAR) strategy--the neoliberal economic strategy to cover 1996-2000. The strategy had mixed success. It brought greater financial discipline and macroeconomic stability but failed to deliver in key areas. Formal employment continued to decline, and despite the ongoing efforts of black empowerment and signs of a fledgling black middle class and social mobility, the country's wealth remains very unequally distributed along racial lines. However, South Africa's budgetary reforms such as the Medium-Term Expenditure Framework and the Public Finance Management Act--which aims at better reporting, auditing, and increased accountability--and the structural changes to its monetary policy framework, including inflation targeting, have created transparency and predictability and are widely acclaimed. Trade liberalization also has progressed substantially since the early 1990s. South Africa reduced its import-weighted average tariff rate from more than 20% in 1994 to 7% in 2002. These efforts, together with South Africa's implementation of its World Trade Organization (WTO) obligations and its constructive role in launching the Doha Development Round, show South Africa's acceptance of free market principles.

Financial Policy
South Africa has a sophisticated financial structure with a large and active stock exchange that ranks 17th in the world in terms of total market capitalization. The South African Reserve Bank (SARB) performs all central banking functions. The SARB is independent and operates in much the same way as Western central banks, influencing interest rates and controlling liquidity through its interest rates on funds provided to private sector banks. Quantitative credit controls and administrative control of deposit and lending rates have largely disappeared. South African banks adhere to the Bank of International Standards core standards.

The South African Government has taken steps to gradually reduce remaining foreign exchange controls, which apply only to South African residents. Private citizens are now allowed a one-time investment of up to 2,000,000 rand (R) in offshore accounts. During 2007, the shareholding threshold (the percentage of shareholding that must be South African) for foreign direct investment outside Africa was lowered from 50 percent to 25 percent to enable South African companies to engage in strategic international partnerships. In addition, South African companies involved in international trade were permitted to operate a single Customer Foreign Currency (CFC) account for all international transactions. Permission was also granted to the Johannesburg Securities Exchange (JSE) to establish a rand currency futures market, in order to deepen South Africa’s financial markets and increase liquidity in the local foreign exchange market.

Trade and Investment
South Africa has rich mineral resources. It is the world's largest producer and exporter of gold and platinum and also exports a significant amount of coal. During 2000, platinum overtook gold as South Africa's largest foreign exchange earner. The value-added processing of minerals to produce ferroalloys, stainless steels, and similar products is a major industry and an important growth area. The country's diverse manufacturing industry is a world leader in several specialized sectors, including motor vehicles and parts, railway rolling stock, synthetic fuels, and mining equipment and machinery.

Primary agriculture accounts for about 3% of the gross domestic product. Major crops include citrus and deciduous fruits, corn, wheat, dairy products, sugarcane, tobacco, wine, and wool. South Africa has many developed irrigation schemes and is a net exporter of food.

South Africa's transportation infrastructure is well-developed, supporting both domestic and regional needs. Johannesburg’s O.R. Tambo International Airport serves as a hub for flights to other southern African countries. Billions have been spent to upgrade international airports and national roads and for the 2010 FIFA World Cup. A brand-new international airport and trade port is being developed in Durban. Bus-rapid-transit (BRT) systems for the World Cup host cities have been developed, but face strong opposition from existing minibus/taxi operators who fear that the new systems would adversely affect their operations.

The domestic telecommunications infrastructure provides modern and efficient service to urban areas, but at comparatively high costs and with limited coverage in rural areas. South Africa has made some strides towards liberalizing its telecommunication market; however, many obstacles exist for further progress. The passing of the Electronic Communications Act (ECA) of 2005 marked a new regulatory framework for liberalizing the telecommunication market in South Africa. Established entities such as Telkom and Multi-choice secured market-share under prior monopoly regimes, which make it difficult for new entrants to offer competitive telecommunications services (e.g. pay-TV and internet). The U.S.-led SEACOM project is the first of a series of under-sea cable projects to become operational. SEACOM will provide the first access to true broadband connectivity for countries on Africa’s Eastern seaboard which are presently 100% reliant on Telkom's expensive satellite-based technology. SEACOM's landing stations will operate on a market-based, "open-access" system.

Annual GDP growth between 2004 and 2007 averaged 5.0 percent, but fell to a rate of 3.1 percent in 2008 because of higher interest rates, power shortages, and weakening commodities prices. GDP contracted by 6.4 percent and 3 percent, seasonally adjusted and annualized, in the first and second quarter of 2009, respectively. South Africa is now in its first recession in 18 years, and analysts forecast negative real growth of about 2 percent in 2009. The government estimates that the economy must achieve growth at a minimum of 6% to offset unemployment, which was estimated at 23.6% in June 2009. Inflation averaged 11.3 percent in 2008. Increasing food and fuel prices have pushed inflation above the upper end of the South African Reserve Bank’s (SARB’s) 3% to 6% inflation target range for the better part of 2007 and 2008. Inflation started to decline in 2009 and accounted for 6.4 percent in August 2009. The SARB’s most recent central inflation forecast projects that inflation will continue its downward trajectory and return to the 3 to 6 percent target range in the second quarter of 2010. Inflation is expected to average 5.8 percent and 5.6 percent in 2010 and 2011, respectively. The SARB has been reducing interest rates at regular intervals since December 2008, and most recently at its August 2009 meeting. The cumulative reduction over the past nine months has been 500 basis points, bringing the prime overdraft rate to 10.5 percent. The government managed to eliminate the fiscal deficit in FY 2007 and FY2008. However, a fiscal deficit of 1.2 percent of GDP was recorded in FY2009, mainly due to the impact of weak domestic demand and the global economic crisis on tax revenues. The fiscal deficit is expected to increase to between 6 and 8 percent of GDP in FY2010.

Exports amounted to 35.4% of GDP in 2008. South Africa's major trading partners include Germany, China, the United States, Japan, and the United Kingdom. Japan displaced the U.S. as South Africa's largest export market in 2008. South Africa's trade with other Sub-Saharan African countries, particularly those in the southern Africa region, has increased substantially. South Africa is a member of the Southern African Customs Union (SACU) and the Southern African Development Community (SADC). In August 1996, South Africa signed a regional trade protocol agreement with its SADC partners. The agreement was ratified in December 1999, and implementation began in September 2000. It provided duty-free treatment for 85% of trade in 2008 and aims for 100% by 2012. A U.S.-SACU Trade, Investment and Development Cooperative Agreement was signed in July 2008. The four areas singled out for special attention under the TIDCA are customs cooperation, technical barriers to trade, sanitary/phytosanitary (SPS) issues, and trade and investment promotion.

South Africa has made great progress in dismantling its old economic system, which was based on import substitution, high tariffs and subsidies, anticompetitive behavior, and extensive government intervention in the economy. The leadership has moved to reduce the government's role in the economy and to promote private sector investment and competition. It has significantly reduced tariffs and export subsidies, loosened exchange controls, cut the secondary tax on corporate dividends, and improved enforcement of intellectual property laws. A competition law was passed and became effective on September 1, 1999. A U.S.-South Africa bilateral tax treaty went into effect on January 1, 1998, and a bilateral trade and investment framework agreement was signed in February 1999.

South Africa is a member of the World Trade Organization (WTO). U.S. products qualify for South Africa's most-favored-nation tariff rates. South Africa is also an eligible country for the benefits under the African Growth and Opportunity Act (AGOA), and most of its products can enter the United States market duty free. South Africa has done away with most import permits except on used products and products regulated by international treaties. It also remains committed to the simplification and continued reduction of tariffs within the WTO framework and maintains active discussions with that body and its major trading partners.

As a result of a November 1993 bilateral agreement, the Overseas Private Investment Corporation (OPIC) can assist U.S. investors in the South African market with services such as political risk insurance and loans and loan guarantees. In July 1996, the United States and South Africa signed an investment fund protocol for a $120 million OPIC fund to make equity investments in South Africa and southern Africa. The Trade and Development Agency also has been actively involved in funding feasibility studies and identifying investment opportunities in South Africa for U.S. businesses.

HIV/AIDS
South Africa is one of the countries most affected by HIV, with 5.7 million HIV-infected individuals. 18.1 % of the 15-49 year old population is infected, and in parts of the country more than 35% of women of childbearing age are infected. Overall, 11.8% of the population is infected. About 1,000 new infections occur each day, and approximately 350,000 AIDS-related deaths occur annually. There are approximately 3.8 million children who have lost one or both parents, and 1.6 million children were expected to have been orphaned by AIDS by 2008. The marked rise in TB and HIV co-infection (with 50% co-infection rates) adds significantly to mortality in this country. South Africa has 0.7% of the world’s population, 17% of the global HIV epidemic, and 28% of global HIV and TB co-infected people. The epidemic could cost South Africa as much as 17% in GDP growth by 2010. The extraction industries, education, and health are among the sectors that will be severely affected. A 2007-2011 national strategic plan provides the structure for a comprehensive response to HIV and AIDS, including a national rollout of antiretroviral therapy. Overall, 30% of those who need it are currently on antiretroviral therapy.

Environment
South Africa's government is committed to managing the country's rich and varied natural resources in a responsible and sustainable manner. In addition, numerous South African non-governmental organizations have emerged as a potent force in the public policy debate on the environment. In international environmental organizations, South Africa is seen as a key leader among developing countries on issues such as climate change, conservation, and biodiversity. This leading role was underscored by South Africa's selection to host the World Summit on Sustainable Development in 2002.

FOREIGN RELATIONS
South African forces fought on the Allied side in World Wars I and II and participated in the postwar UN force in Korea. South Africa was a founding member of the League of Nations and in 1927 established a Department of External Affairs with diplomatic missions in the main west European countries and in the United States. At the founding of the League of Nations, South Africa was given the mandate to govern Southwest Africa, now Namibia, which had been a German colony before World War I. In 1990, Namibia attained independence, with the exception of the enclave of Walvis Bay, which was reintegrated into Namibia in March 1994. After South Africa held its first nonracial election in April 1994, most sanctions imposed by the international community in opposition to the system of apartheid were lifted. On June 1, 1994, South Africa rejoined the Commonwealth, and on June 23, 1994, the UN General Assembly accepted its credentials. South Africa served as the African Union's (AU) first president from July 2003 to July 2004.

Having emerged from the international isolation of the apartheid era, South Africa has become a leading international actor. Its principal foreign policy objective is to promote the economic, political, and cultural regeneration of Africa, through the New Partnership for African Development (NEPAD); to promote the peaceful resolution of conflict in Africa; and to use multilateral bodies to insure that developing countries' voices are heard on international issues. South Africa has played a key role in seeking an end to various conflicts and political crises on the African continent, including in Burundi, the Democratic Republic of the Congo, and Comoros. South Africa has pursued "quiet diplomacy" in its approach to the crisis in Zimbabwe. Zuma so far has not dramatically departed from the foreign policy agenda under the Mbeki administration. The new leader wants to focus increasingly on regional cooperation, and renamed the Foreign Ministry to the Department of International Relations and Cooperation to reflect this goal.

U.S.-SOUTH AFRICAN RELATIONS
The United States has maintained an official presence in South Africa since 1799, when an American consulate was opened in Cape Town. The U.S. Embassy is located in Pretoria, and Consulates General are in Johannesburg, Durban, and Cape Town. Americans and South Africans also have many nongovernmental ties; for example, black and white American missionaries have a long history of activity in South Africa. South Africans (particularly the ANC leadership) also acknowledge support from and ties to the anti-apartheid movement in the U.S.

From the 1970s through the early 1990s, U.S.-South Africa relations were severely affected by South Africa's racial policies. However, since the abolition of apartheid and democratic elections of April 1994, the United States has enjoyed a solid bilateral relationship with South Africa. Although there are differences of position between the two governments, mainly on political issues, these largely do not impede cooperation on a broad range of important subjects. Bilateral cooperation in counter-terrorism, fighting HIV/AIDS, and military relations has been particularly positive. U.S.-South African economic and trade relations are strong. Through the U.S. Agency for International Development (USAID), the United States also provides assistance to South Africa to help it meet its development goals. Peace Corps volunteers began working in South Africa in 1997.

Principal U.S. Officials
Ambassador—Donald Gips
Charge d'Affaires/Deputy Chief of Mission--Helen La Lime
Commercial Counselor--Craig Allen
Economic Counselor—Terri Robl
Political Counselor—Walter N. S. Pflaumer
Management Counselor—John Lavelle
Public Affairs Counselor--Mary Deane Conners
Defense and Army Attache--Colonel Kelly Langdorf
USAID Director--Carleene Dei
Agricultural Attache--Scott Sindelar
Health Attache--Mary Fanning
Country Consular Coordinator--Doron Bard
Consul General Cape Town--Alberta Mayberry
Consul General Durban--Jill Derderian
Consul General Johannesburg--Andrew Passen

The U.S. Embassy in South Africa is located at 877 Pretorius St, Pretoria; PO Box 9536, Pretoria 0001; tel: (27-12) 431-4000; fax: (27-12) 342-2299.

Background Notes : India (11/09)

Thu, 12 Nov 2009 12:03:06 EDT

Background Note: India

November 2009

Bureau of South and Central Asian Affairs

The Taj Mahal is reflected in a pool in Agra, India, June 25, 2003. [© AP Images]

PROFILE

OFFICIAL NAME:
Republic of India

Geography
Area: 3.29 million sq. km. (1.27 million sq. mi.); about one-third the size of the U.S.
Cities: Capital--New Delhi (pop. 12.8 million, 2001 census). Other major cities--Mumbai, formerly Bombay (16.4 million); Kolkata, formerly Calcutta (13.2 million); Chennai, formerly Madras (6.4 million); Bangalore (5.7 million); Hyderabad (5.5 million); Ahmedabad (5 million); Pune (4 million).
Terrain: Varies from Himalayas to flat river valleys and deserts in the west.
Climate: Alpine to temperate to subtropical monsoon.

People
Nationality: Noun and adjective--Indian(s).
Population (2009): 1.17 billion; urban 29%.
Annual growth rate: 1.55%.
Density: 324/sq. km.
Ethnic groups: Indo-Aryan 72%, Dravidian 25%, others 3%. While the national census does not recognize racial or ethnic groups, it is estimated that there are more than 2,000 ethnic groups in India.
Religions: Hindu 81.4%, Muslim 12.4%, Christian 2.3%, Sikh 1.9%, other groups including Buddhist, Jain, Parsi within 1%.
Languages: Hindi, English, and 16 other official languages.
Education: Years compulsory--none. Literacy--61%.
Health: Infant mortality rate--30.15/1,000. Life expectancy--70 years (2009 est.).
Work force (est.): 450 million. Agriculture--60%; industry and commerce--12%; services and government--28%.

Government
Type: Federal republic.
Independence: August 15, 1947.
Constitution: January 26, 1950.
Branches: Executive--president (chief of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--bicameral parliament (Rajya Sabha or Council of States, and Lok Sabha or House of the People). Judicial--Supreme Court.
Political parties: Indian National Congress (INC), Bharatiya Janata Party (BJP), Communist Party of India-Marxist, and numerous regional and small national parties.
Political subdivisions: 28 states,* 7 union territories (including National Capital Territory of Delhi).
Suffrage: Universal over 18.

Economy
GDP (FY 2008): $1.21 trillion ($1,210 billion).
Real growth rate (2008 est.): 6.6%.
Per capita GDP (PPP, FY 2008): $2,900.
Natural resources: Coal, iron ore, manganese, mica, bauxite, chromite, thorium, limestone, barite, titanium ore, diamonds, crude oil.
Agriculture: 18% of GDP. Products--wheat, rice, coarse grains, oilseeds, sugar, cotton, jute, tea.
Industry: 29% of GDP. Products--textiles, jute, processed food, steel, machinery, transport equipment, cement, aluminum, fertilizers, mining, petroleum, chemicals, and computer software.
Services and transportation: 54% of GDP.
Trade: Exports (FY 2008)--$176.4 billion; engineering goods, petroleum products, precious stones, cotton apparel and fabrics, gems and jewelry, handicrafts, tea. Software exports--$22 billion. Imports (FY 2008)--$306 billion; petroleum, machinery and transport equipment, electronic goods, edible oils, fertilizers, chemicals, gold, textiles, iron and steel. Major trade partners--U.S., China, U.A.E., EU, Russia, Japan.

PEOPLE
Although India occupies only 2.4% of the world's land area, it supports over 15% of the world's population. Only China has a larger population. India's median age is 25, one of the youngest among large economies. About 70% live in more than 550,000 villages, and the remainder in more than 200 towns and cities. Over the thousands of years of its history, India has been invaded from the Iranian plateau, Central Asia, Arabia, Afghanistan, and the West; Indian people and culture have absorbed and modified these influences to produce a remarkable racial and cultural synthesis.

Religion, caste, and language are major determinants of social and political organization in India today. However, with more job opportunities in the private sector and better chances of upward social mobility, India has begun a quiet social transformation in this area. The government has recognized 18 official languages; Hindi, the national language, is the most widely spoken, although English is a national lingua franca. Although 81% of its people are Hindu, India also is the home of more than 138 million Muslims--one of the world's largest Muslim populations. The population also includes Christians, Sikhs, Jains, Buddhists, and Parsis.

The Hindu caste system reflects Indian occupational and socially defined hierarchies. Ancient Sanskrit sources divide society into four major categories, priests (Brahmin), warriors (Kshatriya), traders/artisans (Vaishya) and farmers/laborers (Shudra). Although these categories are understood throughout India, they describe reality only in the most general terms. They omit, for example, the tribal people and those outside the caste system formerly known as "untouchables”, or dalits. In reality, Indian society is divided into thousands of jatis--local, endogamous groups based on occupation--and organized hierarchically according to complex ideas of purity and pollution. Discrimination based on caste is officially illegal, but remains prevalent, especially in rural areas. Nevertheless, the government has made strong efforts to minimize the importance of caste through active affirmative action and social policies. Moreover, caste is often diluted if not subsumed in the economically prosperous and heterogeneous cities, where an increasing percentage of India's population lives. In the countryside, expanding education, land reform and economic opportunity through access to information, communication, transport, and credit are helping to lessen the harshest elements of the caste system.

HISTORY
The people of India have had a continuous civilization since 2500 B.C.E., when the inhabitants of the Indus River valley developed an urban culture based on commerce and sustained by agricultural trade. The Harappan Civilization, as it came to be known, declined around 1500 B.C.E., most likely due to ecological changes.

During the second millennium B.C.E., pastoral, Aryan-speaking tribes migrated from the northwest into the subcontinent, settled in the middle Ganges River valley, and adapted to antecedent cultures. Alexander the Great expanded across Central Asia during the 4th century B.C.E., exposing India to Grecian influences. The Maurya Empire came to dominate the Indian subcontinent during the 3rd century B.C.E., reaching its greatest height under Emperor Ashoka.

The political map of ancient and medieval India was made up of myriad kingdoms with fluctuating boundaries. At the height of the Roman Empire under Emperor Hadrian during the 2nd century C.E., the Kushan Empire, originating in ancient Bactria, conquered north India and the trans-Indus region ushering in a period of trade and prosperity. In the 4th and 5th centuries C.E., northern India was unified under the Gupta Dynasty. During this period, known as India's Golden Age, Hindu culture and political administration reached new heights.

Islam spread across the subcontinent over a period of 700 years. In the 10th and 11th centuries, Turks and Afghans invaded India and established the Delhi Sultanate. In the early 16th century, Babur, a Turkish-Mongol adventurer and distant relative of Timurlane and Genghis Khan, established the Mughal Dynasty, which lasted for 200 years. South India followed an independent path, but by the 17th century large areas of South India came under the direct rule or influence of the expanding Mughal Empire. While most of Indian society in its thousands of villages remained untouched by the political struggles going on around them, Indian courtly culture evolved into a unique blend of Hindu and Muslim traditions.

The first British outpost in South Asia was established by the English East India Company in 1619 at Surat on the northwestern coast. Later in the century, the Company opened permanent trading stations at Madras (now Chennai), Bombay (now Mumbai), and Calcutta (now Kolkata), each under the protection of native rulers.

The British expanded their influence from these footholds until, by the 1850s, they controlled most of present-day India, Pakistan, Sri Lanka, and Bangladesh. In 1857, an unsuccessful rebellion in north India led by Indian soldiers seeking the restoration of the Mughal Emperor led the British Parliament to transfer political power from the East India Company to the Crown. Great Britain began administering most of India directly and maintained both political and economic control, while controlling the rest through treaties with local rulers. Imperial India became the “crown jewel” of the rapidly expanding British Empire.

In the late 1800s, the first steps were taken toward self-government in British India with the appointment of Indian councilors to advise the British Viceroy and the establishment of Provincial Councils with Indian members; the British subsequently widened participation in Legislative Councils. Beginning in 1920, Indian leader Mohandas K. Gandhi transformed the Indian National Congress political party into a mass movement to campaign against British colonial rule. The party used both parliamentary and nonviolent resistance and non-cooperation to agitate for independence. During this period, however, millions of Indians served with honor and distinction in the British Indian Army, including service in both World Wars and countless other overseas actions in service of the Empire.

With Indians increasingly united in their quest for independence, a war-weary Britain led by Labor Prime Minister Clement Attlee began in earnest to plan for the end of its suzerainty in India. On August 15, 1947, India became a dominion within the Commonwealth, with Jawaharlal Nehru as Prime Minister. Strategic colonial considerations, as well as political tensions between Hindus and Muslims, led the British to partition British India into two separate states: India, with a Hindu majority; and Pakistan, which consisted of two "wings," East and West Pakistan--currently Bangladesh and Pakistan--with Muslim majorities. India became a republic, but chose to continue as a member of the British Commonwealth, after promulgating its constitution on January 26, 1950.

After independence, the Indian National Congress, the party of Mohandas K. Gandhi and Jawaharlal Nehru, ruled India under the leadership first of Nehru and then his daughter (Indira Gandhi) and grandson (Rajiv Gandhi), with the exception of brief periods in the 1970s and 1980s and during a short period in 1996. From 1998-2004, a coalition led by the Bharatiya Janata Party governed.

Prime Minister Nehru governed the nation until his death in May 1964. Nehru was succeeded by Lal Bahadur Shastri, who also died in office in January 1966. In one month, power passed to Nehru's daughter, Indira Gandhi, Prime Minister from 1966 to 1977. In June 1975, beset with deepening political and economic problems, Mrs. Gandhi declared a state of emergency and suspended many civil liberties. Seeking a mandate at the polls for her policies, she called for elections in March 1977, only to be defeated by Morarji Desai, who headed the Janata Party, an amalgam of five opposition parties.

In 1979, Desai's government crumbled. Charan Singh formed an interim government, which was followed by Mrs. Gandhi's return to power in January 1980. On October 31, 1984, Mrs. Gandhi was assassinated by her Sikh bodyguards, which led to the killings of thousands of Sikhs in New Delhi. Her son, Rajiv, was chosen by the Congress (I)--for "Indira"--Party to take her place. His Congress government was plagued with allegations of corruption resulting in an early call for national elections in November 1989.

Although Rajiv Gandhi's Congress Party won more seats than any other single party in the 1989 elections, he was unable to form a government with a clear majority. The Janata Dal, a union of opposition parties, then joined with the Hindu-nationalist Bharatiya Janata Party (BJP) on the right and the Communists on the left to form the government. This loose coalition collapsed in November 1990, and the Janata Dal, supported by the Congress (I), came to power for a short period, with Chandra Shekhar as Prime Minister. That alliance also collapsed, resulting in national elections in June 1991.

While campaigning in Tamil Nadu on behalf of his Congress (I) party, Rajiv Gandhi was assassinated on May 21, 1991 by Tamil extremists from Sri Lanka unhappy with India's military intervention in that country’s civil war. In the elections, Congress (I) won 213 parliamentary seats and returned to power at the head of a coalition, under the leadership of P.V. Narasimha Rao. This Congress-led government, which served a full 5-year term, initiated a gradual process of economic liberalization under then-Finance Minister Manmohan Singh. These reforms opened the Indian economy to global trade and investment. India's domestic politics also took new shape, as the nationalist appeal of the Congress Party gave way to traditional caste, creed, regional, and ethnic alignments, leading to the founding of a plethora of small, regionally based political parties.

The final months of the Rao-led government in the spring of 1996 were marred by several major corruption scandals, which contributed to the worst electoral performance by the Congress Party in its history. The Hindu-nationalist BJP emerged from the May 1996 national elections as the single-largest party in the Lok Sabha but without a parliamentary majority. Under Prime Minister Atal Bihari Vajpayee, the subsequent BJP coalition lasted only 13 days. With all political parties wishing to avoid another round of elections, a 14-party coalition led by the Janata Dal formed a government known as the United Front, under the former Chief Minister of Karnataka, H.D. Deve Gowda. His government collapsed after less than a year, when the Congress Party withdrew its support in March 1997. Inder Kumar Gujral replaced Deve Gowda as the consensus choice for Prime Minister at the head of a 16-party United Front coalition.

In November 1997, the Congress Party again withdrew support from the United Front. In new elections in February 1998, the BJP won the largest number of seats in Parliament--182--but fell far short of a majority. On March 20, 1998, the President approved a BJP-led coalition government with Vajpayee again serving as Prime Minister. On May 11 and 13, 1998, this government conducted a series of underground nuclear tests, spurring U.S. President Bill Clinton to impose economic sanctions on India pursuant to the 1994 Nuclear Proliferation Prevention Act.

In April 1999, the BJP-led coalition government fell apart, leading to fresh elections in September-October. The National Democratic Alliance--a new coalition led by the BJP--won a majority to form the government with Vajpayee a Prime Minister in October 1999. The NDA government was the first coalition in many years to serve a full 5-year term, providing much-needed political stability.

The Kargil conflict in May-July 1999 and an attack by terrorists on the Indian Parliament in December 2001 led to increased tensions with Pakistan.

Hindu nationalists supportive of the BJP agitated to build a temple on a disputed site in Ayodhya, destroying a 17th century mosque there in December 1992, and sparking widespread religious riots in which thousands, mostly Muslims, were killed. In February 2002, 57 Hindu volunteers returning from Ayodhya were burnt alive when their train caught fire. Alleging that the fire was caused by Muslim attackers, anti-Muslim rioters throughout the state of Gujarat killed over 2,000 people and left 100,000 homeless. The Gujarat state government and the police were criticized for failing to stop the violence and in some cases for participating in or encouraging it.

The ruling BJP-led coalition was defeated in a five-stage election held in April and May of 2004. The Congress Party, under the leadership Sonia Gandhi, the widow of Rajiv Gandhi, formed a coalition government, known as the United Progressive Alliance (UPA). It took power on May 22 with Dr. Manmohan Singh as Prime Minister. The UPA's victory was attributed to dissatisfaction among poorer rural voters that the prosperity of the cities had not filtered down to them, and rejection of the BJP's Hindu nationalist agenda.

The Congress-led UPA government has continued many of the BJP's foreign policies, particularly improving relations with the U.S. Prime Minister Singh and President George W. Bush concluded a landmark U.S.-India strategic partnership framework agreement on July 18, 2005. In March 2006, President Bush visited India to further the many initiatives that underlie the new agreement. The strategic partnership is anchored by a historic civil nuclear cooperation initiative and includes cooperation in the fields of space, high-technology commerce, health issues, democracy promotion, agriculture, and trade and investment.

In July 2008, the UPA won a confidence motion with 275 votes in its favor and 256 against.

In late November 2008, terrorists killed at least 164 people in a series of coordinated attacks around Mumbai. Prime Minister Singh promised a thorough investigation and Home Minister Chidambaram pledged significant reforms to improve India’s counterterrorism agencies.

The Congress-led UPA coalition gained a more stable majority following the May 2009 elections, riding mainly on the support of rural voters. Manmohan Singh became the first Prime Minister since Jawaharlal Nehru to return to power after completing a full 5-year term. In July 2009, Secretary of State Hillary Clinton traveled to India to launch the “Strategic Dialogue,” which called for collaboration in a number of areas, including climate change, trade, education, and counterterrorism. Prime Minister Manmohan Singh is visiting Washington, DC in late November 2009 for the first state visit of the Obama administration.

GOVERNMENT
According to its constitution, India is a "sovereign, socialist, secular, democratic republic." Like the United States, India has a federal form of government. However, the central government in India has greater power in relation to its states, and has adopted a British-style parliamentary system.

The government exercises its broad administrative powers in the name of the president, whose duties are largely ceremonial. A special electoral college elects the president and vice president indirectly for 5-year terms. Their terms are staggered, and the vice president does not automatically become president following the death or removal from office of the president.

Real national executive power is centered in the Cabinet (senior members of the Council of Ministers), led by the prime minister. The president appoints the prime minister, who is designated by legislators of the political party or coalition commanding a parliamentary majority in the Lok Sabha (lower house). The president then appoints subordinate ministers on the advice of the prime minister.

India's bicameral Parliament consists of the Rajya Sabha (Council of States) and the Lok Sabha (House of the People). The Council of Ministers is responsible to the Lok Sabha.

The legislatures of the states and union territories elect 233 members to the Rajya Sabha, and the president appoints another 12. The members of the Rajya Sabha serve 6-year terms, with one-third up for election every 2 years. The Lok Sabha consists of 545 members, who serve 5-year terms; 543 are directly elected, and two are appointed.

India's independent judicial system began under the British, and its concepts and procedures resemble those of Anglo-Saxon countries. The Supreme Court consists of a chief justice and 25 other justices, all appointed by the president on the advice of the prime minister.

India has 28 states* and 7 union territories. At the state level, some legislatures are bicameral, patterned after the two houses of the national parliament. The states' chief ministers are responsible to the legislatures in the same way the prime minister is responsible to Parliament.

Each state also has a presidentially appointed governor, who may assume certain broad powers when directed by the central government. The central government exerts greater control over the union territories than over the states, although some territories have gained more power to administer their own affairs. Local governments in India have less autonomy than their counterparts in the United States. Some states are trying to revitalize the traditional village councils, or Panchayats, to promote popular democratic participation at the village level, where much of the population still lives. Over half a million Panchayats exist throughout India.

Principal Government Officials
President--Pratibha D. Patil
Vice President--Mohammed Hamid Ansari
Prime Minister--Manmohan Singh
Home Minister--P. Chidambaram
Minister of External Affairs--Pranab Mukherjee
Ambassador to the U.S.--Meera Shankar
Ambassador to the UN--Hardeep Singh Puri

India maintains an embassy in the United States at 2107 Massachusetts Avenue NW, Washington, DC 20008 (tel. 202-939-7000, fax 202-265-4351, email indembwash@indiagov.org and consulates general in New York, Chicago, Houston, and San Francisco. The embassy's web site is http://www.indianembassy.org/.

POLITICAL CONDITIONS
Emerging as the nation's single largest party in the May 2009 Lok Sabha election, Congress currently leads a coalition UPA government under Prime Minister Manmohan Singh. Party President Sonia Gandhi was re-elected by the Party National Executive in May 2005. Also a Member of Parliament, she heads the Congress Lok Sabha delegation. Congress prides itself as being a secular, left of center party, with a long history of political dominance. Although its performance in national elections had steadily declined during the previous 12 years, its surprise victory in 2004 was a result of recruiting strong allies into the UPA, the anti-incumbency factor among voters, and its courtship of India's many poor, rural and Muslim voters. Congress political fortunes suffered badly in the 1990s, as many traditional supporters were lost to emerging regional and caste-based parties, such as the Bahujan Samaj Party and the Samajwadi Party, but have rebounded since its May 2004 ascension to power. It currently rules either directly or in coalition with its allies in 10 states. In November 2005, the Congress regained the Chief Ministership of Jammu and Kashmir state, under a power-sharing agreement.

The Bharatiya Janata Party (BJP), led by Rajnath Singh, holds the second-largest number of seats in the Lok Sabha. Former Prime Minister Atal Bihari Vajpayee serves as Chairman of the BJP Parliamentary Party, and former Deputy Prime Minister L.K. Advani is Leader of the Opposition. The Hindu-nationalist BJP draws its political strength mainly from the "Hindi Belt" in the northern and western regions of India. Former Foreign Minister Jaswant Singh was expelled from the party in August 2009 after authoring a book which portrayed the founder of Pakistan, Muhammad Ali-Jinnah, in a positive light.

The party holds power without outside support in the states of Chhattisgarh, Gujarat, Himachal Pradesh, Uttarakhand, Karnataka and Madhya Pradesh; it is part of ruling coalitions in few other states including Bihar, Orissa and Punjab. Popularly viewed as the party of the northern upper caste and trading communities, the BJP made strong inroads into lower castes in recent national and state assembly elections. The party must balance the competing interests of Hindu nationalists, (who advocate construction of a temple on a disputed site in Ayodhya, and other primarily religious issues including the propagation of anti-conversion laws and violence against religious minorities), and center-right modernizers who see the BJP as a party of economic and political reform.

Four Communist and Marxist parties are united in a bloc called the "Left Front," which controls 59 parliamentary seats. The Left Front rules the states of West Bengal and Kerala. The Left Front provided external support to the UPA government until a July 2008 confidence vote. It advocates a secular and Communist ideology and opposes many aspects of economic liberalization and globalization, resulting in dissonance with Prime Minister Singh's liberal economic approach. The Maoist-inspired Naxalite insurgency continues to be a major internal security threat, affecting large parts of eastern India.

ECONOMY
India's population is estimated at more than 1.1 billion and is growing at 1.55% a year. It has the world's 12th largest economy--and the third largest in Asia behind Japan and China--with total GDP in 2008 of around $1.21 trillion ($1,210 billion). Services, industry, and agriculture account for 54%, 29%, and 18% of GDP respectively. India is capitalizing on its large numbers of well-educated people skilled in the English language to become a major exporter of software services and software workers, but more than half of the population depends on agriculture for its livelihood. 700 million Indians live on $2 per day or less, but there is a large and growing middle class of more than 50 million Indians with disposable income ranging from 200,000 to 1,000,000 rupees per year ($4,166-$20,833). Estimates are that the middle class will grow ten-fold by 2025.

India continues to move forward, albeit haltingly, with market-oriented economic reforms that began in 1991. Reforms include increasingly liberal foreign investment and exchange regimes, industrial decontrol, reductions in tariffs and other trade barriers, opening and modernization of the financial sector, significant adjustments in government monetary and fiscal policies, and more safeguards for intellectual property rights.

The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points. India achieved 9.6% GDP growth in 2006, 9.0% in 2007, and 6.6% in 2008, significantly expanding manufactures through late 2008. Growth for the fiscal year ending March 31, 2009 was initially expected to be between 8.5-9.0%, but has been revised downward by a number of economists to 7.0% or less because of the financial crisis and resulting global economic slowdown. Foreign portfolio and direct investment inflows have risen significantly in recent years. They contributed to $255 billion in foreign exchange reserves by June 2007. Government receipts from privatization were about $3 billion in fiscal year 2003-2004, but the privatization program has stalled since then.

Economic growth is constrained by inadequate infrastructure, a cumbersome bureaucracy, corruption, labor market rigidities, regulatory and foreign investment controls, the "reservation" of key products for small-scale industries, and high fiscal deficits. The outlook for further trade liberalization is mixed, and a key World Trade Organization (WTO) Doha Ministerial in July 2008 was unsuccessful due to differences between the U.S. and India (as well as China) over market access. India eliminated quotas on 1,420 consumer imports in 2002 and has incrementally lowered non-agricultural customs duties in recent successive budgets. However, the tax structure is complex, with compounding effects of various taxes.

The United States is India's largest trading partner. Bilateral merchandise trade in 2008 topped nearly $50 billion. Principal U.S. exports are diagnostic or lab reagents, aircraft and parts, advanced machinery, cotton, fertilizers, ferrous waste/scrap metal, and computer hardware. Major U.S. imports from India include textiles and ready-made garments, Internet-enabled services, agricultural and related products, gems and jewelry, leather products, and chemicals.

The rapidly growing software sector is boosting service exports and modernizing India's economy. Software exports crossed $28 billion in FY 2006-2007, while business process outsourcing (BPO) revenues hit $8.3 billion in 2006-2007. Personal computer penetration is 14 per 1,000 persons. The number of cell phone users is expected to rise to nearly 300 million by 2010.

The United States is India's largest investment partner, with a 13% share. India's total inflow of U.S. direct investment was estimated at more than $16 billion through 2008. Proposals for direct foreign investment are considered by the Foreign Investment Promotion Board and generally receive government approval. Automatic approvals are available for investments involving up to 100% foreign equity, depending on the kind of industry. Foreign investment is particularly sought after in power generation, telecommunications, ports, roads, petroleum exploration/processing, and mining.

India's external debt was nearly $230 billion by the end of 2008, up from $126 billion in 2005-2006. Foreign assistance was approximately $3 billion in 2006-2007, with the United States providing about $126 million in development assistance. The World Bank plans to double aid to India to almost $3 billion a year, with focus on infrastructure, education, health, and rural livelihoods.

DEFENSE
The supreme command of the Indian armed forces is vested in the president of India. Policies concerning India's defense, and the armed forces as a whole, are formulated and confirmed by the Cabinet.

The Indian Army numbers over 1.4 million strong and fields 34 divisions. Its primary task is to safeguard the territorial integrity of the country against external threats. The Army has been heavily committed in the recent past to counterterrorism operations in Jammu and Kashmir, as well as the in the Northeast. Its current modernization program focuses on obtaining equipment to be used in combating terror. The Army often provides aid to civil authorities and assists the government in organizing relief operations.

The Indian Navy is by far the most capable navy in the region. The Navy's primary missions are the defense of India and of India's vital sea lines of communication. India relies on the sea for 90% of its oil and natural gas and over 90% of its foreign trade. The Navy currently operates one aircraft carrier with two on order, 14 submarines, and 15 major surface combatants. It is capable of projecting power within the Indian Ocean basin and occasionally operates in the South China Sea, the Mediterranean Sea, and the Arabian Gulf. Fleet introduction of the Brahmos cruise missile, the possible lease of nuclear submarines from Russia, and the introduction of a new aircraft carrier in 2012 will add significantly to the Indian Navy's flexibility and striking power.

Although small, the Indian Coast Guard has been expanding rapidly in recent years. Indian Navy officers typically fill top Coast Guard positions to ensure coordination between the two services. India's Coast Guard is responsible for control of India's huge exclusive economic zone.

Fielding nearly 900 combat aircraft, the Indian Air Force is the world’s fourth largest. It is rapidly becoming a 21st century force through modernization, new tactics and the acquisition of modern aircraft, such as the SU-30MKI, a new advanced jet trainer (BAE Hawk) and the indigenously produced advanced light helicopter (Dhruv). In April 2008 six firms submitted proposals to the Indian Government to manufacture 126 multi-role combat aircraft for the Indian Air Force.

FOREIGN RELATIONS
India's size, population, and strategic location give it a prominent voice in international affairs, and its growing economic strength, military prowess, and scientific and technical capacity give it added weight. The end of the Cold War dramatically affected Indian foreign policy. India remains a leader of the developing world and the Non-Aligned Movement (NAM). India is now strengthening its political and commercial ties with the United States, Japan, the European Union, Iran, China, and the Association of Southeast Asian Nations. India is an active member of the South Asian Association for Regional Cooperation (SAARC).

Always an active member of the United Nations, India now seeks a permanent seat on the UN Security Council. India has a long tradition of participating in UN peacekeeping operations.

Bilateral and Regional Relations:
Pakistan. India and Pakistan have been locked in a tense rivalry since the partition of the subcontinent based on the “two-nations theory” upon achieving independence from Great Britain in 1947. The principal source of contention has been Kashmir, whose Hindu Maharaja at that time chose to join India, although a majority of his subjects were Muslim. India maintains that his decision and subsequent elections in Kashmir have made it an integral part of India. This dispute triggered wars between the two countries in 1947 and 1965 and provoked the Kargil conflict in 1999.

Pakistan and India fought a war in December 1971 following a political crisis in what was then East Pakistan and the flight of millions of Bengali refugees to India. The brief conflict left the situation largely unchanged in the west, where the two armies reached an impasse, but a decisive Indian victory in the east resulted in the creation of Bangladesh.

Since the 1971 war, Pakistan and India have made slow progress toward normalization of relations. In July 1972, Indian Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto met in the Indian hill station of Simla. They signed an agreement by which India would return all personnel and captured territory in the west and the two countries would "settle their differences by peaceful means through bilateral negotiations." Diplomatic and trade relations were re-established in 1976.

The 1979 Soviet invasion of Afghanistan caused new strains between India and Pakistan. Pakistan supported the Afghan resistance, while India implicitly supported the Soviet occupation. In the following eight years, India voiced increasing concern over Pakistani arms purchases, U.S. military aid to Pakistan, and Pakistan's nuclear weapons program. In an effort to curtail tensions, the two countries formed a joint commission. In December 1988, Prime Ministers Rajiv Gandhi and Benazir Bhutto concluded a pact not to attack each other's nuclear facilities and initiated agreements on cultural exchanges and civil aviation.

In 1997, high-level Indo-Pakistani talks resumed after a three-year pause. The Prime Ministers of India and Pakistan met twice, and the foreign secretaries conducted three rounds of talks. In June 1997 at Lahore, the foreign secretaries identified eight "outstanding issues" around which continuing talks would be focused. The dispute over the status of Jammu and Kashmir, an issue since partition, remains the major stumbling block in their dialogue. India maintains that the entire former princely state is an integral part of the Indian union, while Pakistan insists upon the implementation of UN resolutions calling for self-determination for the people of the state.

In September 1997, the talks broke down over the structure of how to deal with the issues of Kashmir and peace and security. Pakistan advocated that separate working groups treat each issue. India responded that the two issues be taken up along with six others on a simultaneous basis. In May 1998 India, and then Pakistan, conducted nuclear tests. Attempts to restart dialogue between the two nations were given a major boost by the February 1999 meeting of both Prime Ministers in Lahore and their signing of three agreements. These efforts were stalled by the intrusion of Pakistani-backed forces into Indian-held territory near Kargil in May 1999 (that nearly turned into full scale war), and by the military coup in Pakistan that overturned the Nawaz Sharif government in October the same year. In July 2001, Mr. Vajpayee and General Pervez Musharraf, leader of Pakistan after the coup, met in Agra, but talks ended after two days without result.

After an attack on the Indian Parliament in December 2001, India-Pakistan relations cooled further as India accused Pakistan of involvement. Tensions increased, fueled by killings in Jammu and Kashmir, peaking in a troop buildup by both sides in early 2002.

Prime Minister Vajpayee's April 18, 2003 speech in Srinagar (Kashmir) revived bilateral efforts to normalize relations. In November 2003, Prime Minister Vajpayee and President Musharraf agreed to a ceasefire, which still holds, along the Line-of-Control in Jammu and Kashmir. After a series of confidence building measures, Prime Minister Vajpayee and President Musharraf met on the sidelines of the January 2004 SAARC summit in Islamabad and agreed to commence a Composite Dialogue addressing outstanding issues between India and Pakistan, including Kashmir.

In February 2004, India and Pakistan agreed to restart the "2+6" Composite Dialogue formula, which provides for talks on Peace and Security and Jammu and Kashmir, followed by technical and Secretary-level discussions on six other bilateral disputes: Siachen Glacier, Wuller Barrage/Tulbul Navigation Project, Sir Creek estuary, Terrorism and Drug Trafficking, Economic and Commercial cooperation, and the Promotion of Friendly Exchanges in various fields. The restart of the Composite Dialogue process was especially significant given the almost six years that had transpired since the two sides agreed to this formula in 1997-1998. The UPA government continued the Composite Dialogue with Pakistan. Following the October 2005 earthquake in Kashmir, the two governments coordinated relief efforts and opened access points along the Line-of-Control to allow relief supplies to flow from India to Pakistan and to allow Kashmiris from both sides to visit one another.

The Foreign Secretary talks resumed in November 2006, after a three-month delay following the July 11, 2006 terrorist bombings in Mumbai. The meeting generated modest progress, with the two sides agreeing to establish a joint mechanism on counterterrorism. Since 2006, India and Pakistan have continued to take part in the Composite Dialogue process in an effort to maintain the peace process and strengthen bilateral relations. Since Pakistani elections in February 2008 the Indian Minister of External Affairs and the Indian Foreign Secretary have met with their new counterparts to advance the Composite Dialogue talks, reaffirming a commitment to maintain the ceasefire along the Line-of-Control as well as increasing people-to-people connections through improving cross-border bus services. The July 2008 bombing of the Indian Embassy in Kabul and the Mumbai terrorist attacks in November 2008 have increased tensions between India and Pakistan. India continues to insist that Pakistan must do its part to dismantle terror networks operating from its territory and prosecute those who had a hand in planning the Mumbai attacks.

SAARC. Certain aspects of India's relations within the subcontinent are conducted through the South Asian Association for Regional Cooperation (SAARC). Its members are Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka, with the People's Republic of China, Iran, Japan, European Union, Republic of Korea, and the U.S. as observers. Established in 1985, SAARC encourages cooperation in agriculture, rural development, science and technology, culture, health, population control, narcotics, and terrorism.

SAARC has intentionally stressed these "core issues" and avoided those which could prove divisive, although political dialogue is often conducted on the margins of SAARC meetings. In 1993, India and its SAARC partners signed an agreement gradually to lower tariffs within the region. Forward movement in SAARC had slowed because of tension between India and Pakistan, and the SAARC summit scheduled for 1999 was not held until January 2002. In addition, to boost the process of normalizing India's relationship with Pakistan, the January 2004 SAARC summit in Islamabad produced an agreement to establish a South Asia Free Trade Area (SAFTA). All the member governments have ratified SAFTA, which was slated to come into force on January 1, 2006, with a series of graduated tariff cuts through 2015. As of December 2006, however, the FTA partners were still negotiating sensitive product lists, rules of origin, and technical assistance. India hosted the 2007 SAARC summit, which called for greater regional cooperation on trade, environmental, social, and counterterrorism issues. At the 2008 SAARC summit in Sri Lanka, the SAFTA member countries signed a protocol for Afghanistan’s accession and several countries (Including India, Pakistan, and Sri Lanka) agreed to drop some items from their sensitive product lists.

China. Despite suspicions remaining from a 1962 border conflict between India and China and continuing territorial/boundary disputes, Sino-Indian relations have improved gradually since 1988. Both countries have sought to reduce tensions along the frontier, expand trade and cultural ties, and normalize relations. Their bilateral trade reached $24 billion in 2006. China is India's second-largest trading partner behind the U.S.

A series of high-level visits between the two nations has improved relations. In December 1996, Chinese President Jiang Zemin visited India on a tour of South Asia. While in New Delhi, he and the Indian Prime Minister signed a series of confidence-building measures along the disputed border, including troop reductions and weapons limitations.

Chinese Premier Wen Jiabao invited Prime Minister Vajpayee to visit China in June 2003. They recognized the common goals of both countries and made the commitment to build a "long-term constructive and cooperative partnership" to peacefully promote their mutual political and economic goals without encroaching upon their good relations with other countries. In Beijing, Prime Minister Vajpayee proposed the designation of special representatives to discuss the border dispute at the political level, a process that is still under way.

In November 2006, President Hu Jintao made an official state visit to India, further cementing Sino-Indian relations. India and China are building on growing economic ties to improve other aspects of their relationship such as counterterrorism, energy, and trade. In another symbol of improved ties, the two countries opened the Nathu La Pass to bilateral trade in July 2006 for the first time in 40 years. Though it is the first direct land trade route in decades, trade is expected to be local and small since the pass is open only four months a year.

Prime Minister Manmohan Singh met Chinese President Hu Jintao in January 2008 in Beijing in an effort to reinforce their confidence to further develop ties, vowing to promote their relations to a higher level. The meetings cemented a shared vision for the 21st century, agreeing to raise the annual volume of bilateral trade to $60 billion by 2010. Despite flare-ups over border issues, China-India relations remain stable at the strategic level.

Former Soviet Union. The collapse of the Soviet Union in 1991 and the emergence of the Commonwealth of Independent States (CIS) had major repercussions for Indian foreign policy. India's substantial trade with the region plummeted after the Soviet collapse and has yet to recover. Longstanding military supply relationships were similarly disrupted due to questions over financing. Russia nonetheless remains India's largest supplier of military systems and spare parts.

Russia and India have not renewed the 1971 Indo-Soviet Peace and Friendship Treaty and follow what both describe as a more pragmatic, less ideological relationship. The visit of Russian President Boris Yeltsin to India in January 1993 helped cement this new relationship. The pace of high-level visits has since increased, as has discussion of major defense purchases. UPA leader Sonia Gandhi and Prime Minister Singh visited Russia in July 2005. President Vladimir Putin traveled to India in January 2007 to attend an Indo-Russia Summit and was the guest of honor at India's Republic Day celebrations. President Medvedev visited India in December 2008 and signed a civil nuclear agreement.

U.S.-INDIA RELATIONS
Recognizing India as a key to strategic U.S. interests, the United States has sought to strengthen its relationship with India. The two countries are the world's largest democracies, both committed to political freedom protected by representative government. India is also moving gradually toward greater economic freedom. The U.S. and India have a common interest in the free flow of commerce and resources, including through the vital sea lanes of the Indian Ocean. They also share an interest in fighting terrorism and in creating a strategically stable Asia.

There were some differences, however, including over India's nuclear weapons programs and the pace of India's economic reforms. In the past, these concerns may have dominated U.S. thinking about India, but today the U.S. views India as a growing world power with which it shares common strategic interests. A strong partnership between the two countries will continue to address differences and shape a dynamic and collaborative future.

In late September 2001, President Bush lifted sanctions imposed under the terms of the 1994 Nuclear Proliferation Prevention Act following India's nuclear tests in May 1998. The nonproliferation dialogue initiated after the 1998 nuclear tests has bridged many of the gaps in understanding between the countries. In a meeting between President Bush and Prime Minister Vajpayee in November 2001, the two leaders expressed a strong interest in transforming the U.S.-India bilateral relationship. High-level meetings and concrete cooperation between the two countries increased during 2002 and 2003. In January 2004, the U.S. and India launched the Next Steps in Strategic Partnership (NSSP), which was both a milestone in the transformation of the bilateral relationship and a blueprint for its further progress.

In July 2005, President Bush hosted Prime Minister Singh in Washington, DC. The two leaders announced the successful completion of the NSSP, as well as other agreements which further enhance cooperation in the areas of civil nuclear, civil space, and high-technology commerce. Other initiatives announced at this meeting include: an U.S.-India Economic Dialogue, Fight Against HIV/AIDS, Disaster Relief, Technology Cooperation, Democracy Initiative, an Agriculture Knowledge Initiative, a Trade Policy Forum, Energy Dialogue and CEO Forum. President Bush made a reciprocal visit to India in March 2006, during which the progress of these initiatives were reviewed, and new initiatives were launched.

In December 2006, Congress passed the historic Henry J. Hyde United States-India Peaceful Atomic Cooperation Act, which allows direct civilian nuclear commerce with India for the first time in 30 years. U.S. policy had opposed nuclear cooperation with India because the country had developed nuclear weapons in contravention of international conventions and never signed the Nuclear Non-Proliferation Treaty. The legislation clears the way for India to buy U.S. nuclear reactors and fuel for civilian use.

In July 2007, the United States and India reached a historic milestone in their strategic partnership by completing negotiations on the bilateral agreement for peaceful nuclear cooperation, also known as the "123 agreement." This agreement, signed by Secretary of State Condoleezza Rice and External Affairs Minister Mukherjee on October 10, 2008, governs civil nuclear trade between the two countries and opens the door for American and Indian firms to participate in each other's civil nuclear energy sector.

In July 2009, Secretary of State Hillary Clinton traveled to India to launch the “Strategic Dialogue,” which called for collaboration in a number of areas, including energy, climate change, trade, education, and counterterrorism. Prime Minister Manmohan Singh is visiting Washington, DC in late November 2009 for the first state visit of the Obama administration.

Principal U.S. Embassy Officials
Ambassador--Timothy Roemer
Deputy Chief of Mission--Steven White
Public Affairs--Michael Pelletier
Political Affairs--Uzra Zeya
Economic, Environmental, and Scientific Affairs--Blair Hall
Commercial Affairs--Carmine D'Aloisio
Regional Security Officer--Earl Miller
Agricultural Affairs--Holly Higgins
Management Affairs--Gerri O'Brien
Consular Affairs--James Herman
USAID Mission Director--Erin Soto

Consuls General
Mumbai (formerly Bombay)--Paul Folmsbee
Kolkata (formerly Calcutta)--Beth Payne
Chennai (formerly Madras)--Andrew Simkin
Hyderabad--Cornelis Keur

The U.S. Embassy in India is located on Shantipath, Chanakyapuri, New Delhi 110021 (tel. 91-11-2419-8000; fax: 91-11-24190017, website http://newdelhi.usembassy.gov). Embassy and consulate working hours are Monday to Friday, 8:30 a.m. to 5:30 p.m. Visa application hours are Monday to Friday, 8:30 a.m. to 10:00 a.m.

*This number includes the Indian state of Jammu and Kashmir. The United States considers all of the former princely state of Kashmir to be disputed territory. India, Pakistan, and China each control parts of Kashmir.

NOTE
Travel: Please consult Consular Affairs.
Business Information: Please consult the Department of Commerce.

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.

Background Notes : Sudan (11/09)

Thu, 19 Nov 2009 12:03:59 EDT

Background Note: Sudan

November 2009

Bureau of African Affairs

Tribal dancers participate in celebration, Juba, Sudan, January 9, 2007. [© AP Images]

PROFILE

OFFICIAL NAME:
Republic of the Sudan

Geography
Area: 2.5 million sq. km. (967,500 sq. mi.); the largest country in Africa and almost the size of continental U.S. east of the Mississippi River.
Cities: Capital--Khartoum (pop. 1.4 million). Other cities--Omdurman (2.1 million), Port Sudan (pop. 450,000), Kassala, Kosti, Juba (capital of southern region).
Land boundaries: Central African Republic, Chad, Democratic Republic of the Congo, Egypt, Eritrea, Ethiopia, Kenya, Libya, and Uganda.
Terrain: Generally flat with mountains in east and west. Khartoum is situated at the confluence of the Blue and White Nile Rivers. The southern regions are inundated during the annual floods of the Nile River system (the Suud or swamps).
Climate: Desert and savanna in the north and central regions and tropical in the south.

People
Nationality: Noun and adjective (sing. and pl.)--Sudanese.
Population (2008 est.): 40,218,456; 30%-33% urban.
Annual growth rate (2004 est.): 2.134%.
Ethnic groups: Arab/Muslim north and black African/Christian and animist south.
Religions: Islam (official), indigenous beliefs (southern Sudan), Christianity.
Languages: Arabic (official), English, tribal languages.
Education: Years compulsory--8. Attendance--35%-40%. Literacy--61%.
Health: Infant mortality rate--86.98/1,000. Life expectancy--50.28 yrs.
Work force: Agriculture--80%; industry and commerce--7%; government--13%.

Government
Independence: January 1, 1956.
Type: Provisional Government established by the Comprehensive Peace Agreement (CPA) signed in January 2005 that provides for power sharing pending national elections. The CPA stipulates that national elections are to occur no later than July 2009. Elections are currently scheduled for April 2010.
Constitution: The Interim National Constitution was adopted on July 6, 2005. It was drafted by the National Constitutional Review Commission, as mandated by the January 2005 CPA. The Government of Southern Sudan also has a constitution adopted in December 2005; it was certified by the Ministry of Justice to be in conformity with the Interim National Constitution and the Comprehensive Peace Agreement.
Branches: Executive--executive authority is held by the president, who also is the prime minister, head of state, head of government, and commander in chief of the armed forces; effective July 9, 2005, the executive branch includes a first vice president and a vice president. As stipulated by the Comprehensive Peace Agreement, the first vice president position is held by a person selected by the Sudan People’s Liberation Movement (SPLM). Legislative--National Legislature. The National Assembly, the lower house, has 450 members with a power-sharing formula which allows the ruling National Congress Party to get 52%; the SPLM, 28%; other Northern and Southern parties, 14% and 6% respectively. There is also an upper house, the Council of States, which is composed of two representatives from each of the nation's 26 states, including two observers from Abyei. Judicial--High Court, Minister of Justice, Attorney General, civil and special tribunals.
Administrative subdivisions: Twenty-six states, each with a governor appointed by the president, along with a state cabinet and a state legislative assembly.
Political parties: Currently there are several political parties in both the nation's north and south. All political parties were banned following the June 30, 1989 military coup. Political associations, taking the place of parties, were authorized in 2000. Some parties are in self-imposed exile. The principal national parties are the National Congress Party (NCP), which attracts mainly northern support, and the Sudan People’s Liberation Movement (SPLM), a south Sudan-based party. These two parties are signatories to the CPA, and form a Government of National Unity (GNU).
Central government budget (2007 est.): $9.201 billion.
Defense (2005 est.): 3% of GDP.

Economy
GDP (2008 est.): 88.95 billion
GDP annual growth rate (2008 est.): 5.3%.
Per capita income GDP (2008 est.): $2,200.
Avg. annual inflation rate (2008 est.): 16.5%.
Natural resources: Modest reserves of oil, natural gas, gold, iron ore, copper, and other industrial metals.
Agriculture: Products--cotton, peanuts, sorghum, sesame seeds, gum arabic, sugarcane, millet, livestock.
Industry: Types--motor vehicle assembly, cement, cotton, edible oils and sugar refining.
Trade: Exports (2008 est.)--$13.62 billion f.o.b.: crude oil and petroleum products, cotton, gold, sorghum, peanuts, gum arabic, sugar, meat, hides, live animals, and sesame seeds. Major markets--Egypt, United Arab Emirates, Saudi Arabia, Malaysia, China, South Korea, Japan. Imports (2007 est.)--$7.757 billion f.o.b.: oil and petroleum products, oil pipeline, pumping and refining equipment, chemical products and equipment, wheat and wheat flour, transport equipment, foodstuffs, tea, agricultural inputs and machinery, industrial inputs and manufactured goods. Major suppliers--European Union, China, Malaysia, Saudi Arabia, Egypt, United Arab Emirates, and India.
Fiscal year: January 1-December 31.

PEOPLE
Sudan’s population is one of the most diverse on the African continent. Within two distinct major cultures--Arab and black African--there are hundreds of ethnic and tribal subdivisions and language groups, which make effective collaboration among them a major political challenge.

The northern states cover most of the Sudan and include most of the urban centers. Most of the 22 million Sudanese who live in this region are Arabic-speaking Muslims, though the majority also uses a non-Arabic mother tongue--e.g., Nubian, Beja, Fur, Nuban, Ingessana, etc. Among these are several distinct tribal groups: the Kababish of northern Kordofan, a camel-raising people; the Ja’alin and Shaigiyya groups of settled tribes along the rivers; the semi-nomadic Baggara of Kordofan and Darfur; the Hamitic Beja in the Red Sea area and Nubians of the northern Nile areas, some of whom have been resettled on the Atbara River; and the Nuba of southern Kordofan and Fur in the western reaches of the country.

The southern region has a population of around 6 million and a predominantly rural, subsistence economy. Except for a ten-year hiatus, southern Sudan has been embroiled in conflict, resulting in major destruction and displacement since independence. The conflict has severely affected the population of the South resulting in over 2 million deaths and more than 4 million people displaced. The Southern Sudanese practice mainly indigenous traditional beliefs, although Christian missionaries have converted some. The South also contains many tribal groups and many more languages than are used in the north. The Dinka--whose population is estimated at more than 1 million--is the largest of the many black African tribes in Sudan. The Shilluk and the Nuer are among the Nilotic tribes. The Azande, Bor, and Jo Luo are Sudanic tribes in the west, and the Acholi and Lotuhu live in the extreme south, extending into Uganda.

In 2008, Sudan's population reached an estimated 40.2 million. A new census was conducted in early 2008. The census results were released in early 2009.

HISTORY
Sudan was a collection of small, independent kingdoms and principalities from the beginning of the Christian era until 1820-21, when Egypt conquered and unified the northern portion of the country. However, neither the Egyptian nor the Mahdist state (1883-1898) had any effective control of the southern region outside of a few garrisons. Southern Sudan remained an area of fragmented tribes, subject to frequent attacks by slave raiders.

In 1881, a religious leader named Muhammad ibn Abdalla proclaimed himself the Mahdi, or the "expected one," and began a religious crusade to unify the tribes in western and central Sudan. His followers took on the name "Ansars" (the followers) which they continue to use today and are associated with the single largest political grouping, the Umma Party, led by a descendant of the Mahdi, Sadiq al Mahdi.

Taking advantage of dissatisfaction resulting from Ottoman-Egyptian exploitation and maladministration, the Mahdi led a nationalist revolt culminating in the fall of Khartoum in 1885. The Mahdi died shortly thereafter, but his state survived until overwhelmed by an invading Anglo-Egyptian force under Lord Kitchener in 1898. While nominally administered jointly by Egypt and Britain, Britain exercised control, formulated policies, and supplied most of the top administrators.

Independence
In February 1953, the United Kingdom and Egypt concluded an agreement providing for Sudanese self-government and self-determination. The transitional period toward independence began with the inauguration of the first parliament in 1954. With the consent of the British and Egyptian Governments, Sudan achieved independence on January 1, 1956, under a provisional constitution. This constitution was silent on two crucial issues for southern leaders--the secular or Islamic character of the state and its federal or unitary structure. However, the Arab-led Khartoum government reneged on promises to southerners to create a federal system, which led to a mutiny by southern army officers that launched 17 years of civil war (1955-72).

Sudan has been at war with itself for more than three quarters of its existence. Since independence, protracted conflict rooted in deep cultural and religious differences have slowed Sudan’s economic and political development and forced massive internal displacement of its people. Northerners, who have traditionally controlled the country, have sought to unify it along the lines of Arabism and Islam despite the opposition of non-Muslims, southerners, and marginalized peoples in the west and east. The resultant civil strife affected Sudan’s neighbors, as they alternately sheltered fleeing refugees or served as operating bases for rebel movements.

In 1958, General Ibrahim Abboud seized power and pursued a policy of Arabization and Islamicization for both North and South Sudan that strengthened Southern opposition. General Abboud was overthrown in 1964 and a civilian caretaker government assumed control. Southern leaders eventually divided into two factions, those who advocated a federal solution and those who argued for self-determination, a euphemism for secession since it was assumed the south would vote for independence if given the choice.

Until 1969, there was a succession of governments that proved unable either to agree on a permanent constitution or to cope with problems of factionalism, economic stagnation, and ethnic dissidence. These regimes were dominated by "Arab" Muslims who asserted their Arab-Islamic agenda and refused any kind of self-determination for southern Sudan.

In May 1969, a group of communist and socialist officers led by Colonel Gaafar Muhammad Nimeiri, seized power. A month after coming to power, Nimeiri proclaimed socialism (instead of Islamism) for the country and outlined a policy of granting autonomy to the South. Nimeiri in turn was the target of a coup attempt by communist members of the government. It failed and Nimeiri ordered a massive purge of communists. This alienated the Soviet Union, which withdrew its support.

Already lacking support from the Muslim parties he had chased from power, Nimeiri could no longer count on the communist faction. Having alienated the right and the left, Nimeiri turned to the south as a way of expanding his limited powerbase. He pursued peace initiatives with Sudan’s hostile neighbors, Ethiopia and Uganda, signing agreements that committed each signatory to withdraw support for the other’s rebel movements. He then initiated negotiations with the southern rebels and signed an agreement in Addis Ababa in 1972 that granted a measure of autonomy to the South. Southern support helped him put down two coup attempts, one initiated by officers from the western regions of Darfur and Kordofan who wanted for their region the same privileges granted to the south.

However, the Addis Ababa Agreement had no support from either the secularist or Islamic Northern parties. Nimeiri concluded that their lack of support was more threatening to his regime than lack of support from the south so he announced a policy of national reconciliation with all the religious opposition forces. These parties did not feel bound to observe an agreement they perceived as an obstacle to furthering an Islamist state. The scales against the peace agreement were tipped in 1979 when Chevron discovered oil in the south. Northern pressure built to abrogate those provisions of the peace treaty granting financial autonomy to the south. Ultimately in 1983, Nimeiri abolished the Southern region, declared Arabic the official language of the South (instead of English) and transferred control of Southern armed forces to the central government. This was effectively a unilateral abrogation of the 1972 peace treaty. The second Sudan civil war began in January 1983 when southern soldiers mutinied rather than follow orders transferring them to the North.

In September 1983, as part of an Islamicization campaign, President Nimeiri announced that traditional Islamic punishments drawn from Shari’a (Islamic Law) would be incorporated into the penal code. This was controversial even among Muslim groups. Amputations for theft and public lashings for alcohol possession became common. Southerners and other non-Muslims living in the north were also subjected to these punishments.

In April 1985, while out of the country, Nimeiri was overthrown by a popular uprising in Khartoum provoked by a collapsing economy, the war in the south, and political repression. Gen. Suwar al-Dahab headed the transitional government. One of its first acts was to suspend the 1983 constitution and disband Nimeiri’s Sudan Socialist Union.

Elections were held in April 1986, and a civilian government took over power. There were tentative moves towards negotiating peace with the south. However, any proposal to exempt the south from Islamic law was unacceptable to those who supported Arabic supremacy. In 1989, an Islamic army faction led by General Umar al-Bashir mounted a coup and installed the National Islamic Front. The new government’s commitment to the Islamic cause intensified the North-South conflict.

The Bashir government combined internal political repression with international Islamist activism. It supported radical Islamist groups in Algeria and supported Iraq’s invasion of Kuwait. Khartoum was established as a base for militant Islamist groups: radical movements and terrorist organizations like Osama Bin Laden’s al Qaida were provided a safe haven and logistical aid in return for financial support. In 1996, the UN imposed sanctions on Sudan for alleged connections to the assassination attempt on Egyptian President Mubarak.

Meanwhile, the period of the 1990s saw a growing sense of alienation in the western and eastern regions of Sudan from the Arab center. The rulers in Khartoum were seen as less and less responsive to the concerns and grievances of both Muslim and non-Muslim populations across the country. Alienation from the "Arab" center caused various groups to grow sympathetic to the southern rebels led by the Sudan People’s Liberation Movement/Army (SPLM/A), and in some cases, prompted them to flight alongside it.

The policy of the ruling regime toward the South was to pursue the war against the rebels while trying to manipulate them by highlighting tribal divisions. Ultimately, this policy resulted in the rebels’ uniting under the leadership of Colonel John Garang. During this period, the SPLM/A rebels also enjoyed support from Ethiopia, Eritrea, and Uganda. The Bashir government's "Pan-Islamic" foreign policy, which provided support for neighboring radical Islamist groups, was partly responsible for this support for the rebels.

The 1990s saw a succession of regional efforts to broker an end to the Sudanese civil war. Beginning in 1993, the leaders of Eritrea, Ethiopia, Uganda, and Kenya pursued a peace initiative for the Sudan under the auspices of the Intergovernmental Authority for Development (IGAD), but results were mixed. Despite that record, the IGAD initiative promulgated the 1994 Declaration of Principles (DOP) that aimed to identify the essential elements necessary to a just and comprehensive peace settlement; i.e., the relationship between religion and the state, power sharing, wealth sharing, and the right of self-determination for the south. The Sudanese Government did not sign the DOP until 1997 after major battlefield losses to the SPLA. That year, the Khartoum government signed a series of agreements with rebel factions under the banner of "Peace from Within." These included the Khartoum, Nuba Mountains, and Fashoda Agreements that ended military conflict between the government and significant rebel factions. Many of those leaders then moved to Khartoum where they assumed marginal roles in the central government or collaborated with the government in military engagements against the SPLA. These three agreements paralleled the terms and conditions of the IGAD agreement, calling for a degree of autonomy for the south and the right of self-determination.

End to the Civil War
In July 2002, the Government of Sudan and the SPLM/A reached an historic agreement on the role of state and religion and the right of southern Sudan to self-determination. This agreement, known as the Machakos Protocol and named after the town in Kenya where the peace talks were held, concluded the first round of talks sponsored by the IGAD. The effort was mediated by retired Kenyan General Lazaro Sumbeiywo. Peace talks resumed and continued during 2003, with discussions focusing on wealth sharing and three contested areas.

On November 19, 2004, the Government of Sudan and the SPLM/A signed a declaration committing themselves to conclude a final comprehensive peace agreement by December 31, 2004, in the context of an extraordinary session of the United Nations Security Council (UNSC) in Nairobi, Kenya--only the fifth time the Council has met outside of New York since its founding. At this session, the UNSC unanimously adopted Resolution 1574, which welcomed the commitment of the government and the SPLM/A to achieve agreement by the end of 2004, and underscored the international community’s intention to assist the Sudanese people and support implementation of the comprehensive peace agreement. In keeping with their commitment to the UNSC, the Government of Sudan and the SPLM/A initialed the final elements of the comprehensive agreement on December 31, 2004. The two parties formally signed the Comprehensive Peace Agreement (CPA) on January 9, 2005. The U.S. and the international community have welcomed this decisive step forward for peace in Sudan.

GOVERNMENT AND POLITICAL CONDITIONS

Comprehensive Peace Agreement
The 2005 CPA established a new Government of National Unity and the interim Government of Southern Sudan and called for wealth-sharing, power-sharing, and security arrangements between the two parties. The historic agreement provides for a ceasefire, withdrawal of troops from southern Sudan, and the repatriation and resettlement of refugees. It also stipulates that by the end of the six-year interim period, during which the various provisions of the CPA are implemented, there will be elections at all levels, including for president, state governors, and national and state legislatures.

On July 9, 2005, the Presidency was inaugurated with al-Bashir sworn in as President and John Garang, SPLM/A leader, installed as First Vice President of Sudan. Ratification of the Interim National Constitution followed. The Constitution declares Sudan to be a “democratic, decentralized, multi-cultural, multi-ethnic, multi-religious, and multi-lingual State.”

On July 30, 2005, the charismatic and revered SPLM leader John Garang died in a helicopter crash. The SPLM/A immediately named Salva Kiir, Garang’s deputy, as First Vice President. As stipulated in the CPA, Kiir now also holds the posts of President of the Government of Southern Sudan and Commander-in-Chief of the SPLA.

Implemented provisions of the CPA include the formation of the National Legislature, appointment of Cabinet members, establishment of the Government of Southern Sudan and the signing of the interim Southern Sudan Constitution, and the appointment of state governors and adoption of state constitutions. The electoral law paving the way for national elections that were expected in 2009 was passed in July 2008.

New CPA-mandated commissions have also been created. Thus far, those formed include the National Electoral Commission, Assessment and Evaluation Commission, National Petroleum Commission, Fiscal and Financial Allocation and Monitoring Commission, and the North-South Border Commission. The Ceasefire Political Commission, Joint Defense Board, and Ceasefire Joint Military Committee were also established as part of the security arrangements of the CPA.

With the establishment of the National Population Census Council, a population census was conducted in April/May 2008 in preparation for national elections now scheduled for April 2010. The results from the census were released in early 2009. The CPA mandates that a referendum be held no later than January 2011, giving southerners the opportunity to vote either for unity within Sudan or separation.

Progress has been achieved during the last four years, though implementation of some CPA requirements has been slow, and there are still major issues that need to be addressed. The issue of the boundaries of Abyei was finally resolved through arbitration in The Hague concluding in July 2009, and both sides have accepted the arbitration decision. The North-South border has not yet been demarcated, however. While much progress has been made toward holding national elections, the pace has been slow, and additional work needs to be done in order to hold elections by April 2010. In August 2009, in conjunction with discussions facilitated by the United States, the two CPA parties signed an agreement charting a path forward on ten points critical to implementation of the CPA. The CPA is the mainstay of peace in Sudan, and the international community is highly invested in making sure it is implemented effectively.

Darfur
In 2003, while the historic north-south conflict was on its way to resolution, increasing reports began to surface of attacks on civilians, especially aimed at non-Arab tribes in the extremely marginalized Darfur region of Sudan. A rebellion broke out in Darfur, led by two rebel groups--the Sudan Liberation Movement/Army (SLM/A) and the Justice and Equality Movement (JEM). These groups represented agrarian farmers who are mostly non-Arabized black African Muslims. In seeking to defeat the rebel movements, the Government of Sudan increased arms and support to local, rival tribes and militias, which have come to be known as the "Janjaweed." Their members were composed mostly of Arabized black African Muslims who herded cattle, camels, and other livestock. Attacks on the civilian population by the Janjaweed, often with the direct support of Government of Sudan Armed Forces (SAF), have led to the death of hundreds of thousands of people in Darfur, with an estimated 2 million internally displaced people and another 250,000 refugees in neighboring Chad.

On September 9, 2004, Secretary of State Colin L. Powell told the Senate Foreign Relations Committee, "genocide has been committed in Darfur and that the Government of Sudan and the Janjaweed bear responsibility--and that genocide may still be occurring." President George W. Bush echoed this in July 2005, when he stated that the situation in Darfur was "clearly genocide."

Intense international efforts to solve the crisis got underway, and a cease-fire between the parties was signed in N’Djamena, Chad, on April 8, 2004. However, despite the deployment of an African Union (AU) military mission to monitor implementation of the cease-fire and investigate violations, violence continued. The SLM/A and JEM negotiated with the Government of Sudan under African Union auspices, resulting in an agreement being signed regarding additional protocols addressing the humanitarian and security aspects of the conflict on November 9, 2004. Like previous agreements, however, these were violated by both sides. Talks resumed in Abuja on June 10, 2005, resulting in a July 6 signing of a Declaration of Principles. Further talks were held in the fall and early winter of 2005 and covered power sharing, wealth sharing, and security arrangements. These negotiations were complicated by a split that occurred in SLM/A leadership. The SLM/A now had a faction loyal to Minni Minawi and a faction loyal to Abdel Wahid.

The African Union, with the support of the United Nations Security Council (UNSC), the U.S., and the rest of the international community, began deploying a larger monitoring and observer force in October 2004. The UNSC had passed three resolutions (1556, 1564, and 1574), all intended to compel the Government of Sudan to rein in the Janjaweed, protect the civilian population and humanitarian participants, seek avenues toward a political settlement to the humanitarian and political crisis, and recognize the need for the rapid deployment of an expanded African Union mission in Darfur. The U.S. has been a leader in pressing for strong international action by the United Nations and its agencies.

A series of UNSC resolutions in late March 2005 underscored the concerns of the international community regarding Sudan's continuing conflicts. Resolution 1590 established the UN Mission in Sudan (UNMIS) for an initial period of six months and decided that UNMIS would consist of up to 10,000 military personnel and up to 715 civilian police personnel. It requested UNMIS to coordinate with the African Union Mission in Sudan (AMIS) to foster peace in Darfur, support implementation of the CPA, facilitate the voluntary return of refugees and internally displaced persons, provide humanitarian demining assistance, and protect human rights. The resolution also called on the Government of Sudan and rebel groups to resume the Abuja talks and support a peaceful settlement to the conflict in Darfur, including ensuring safe access for peacekeeping and humanitarian operations.

Resolution 1591 criticized the Government of Sudan and rebels in Darfur for having failed to comply with several previous UNSC resolutions, for ceasefire violations, and for human rights abuses. The resolution also called on all parties to resume the Abuja talks and to support a peaceful settlement to the conflict in Darfur; it also forms a monitoring committee charged with enforcing a travel ban and asset freeze of those determined to impede the peace process or violate human rights. Additionally, the resolution demanded that the Government of Sudan cease conducting offensive military flights in and over the Darfur region. Finally, Resolution 1593 referred the situation in Darfur to the prosecutor of the International Criminal Court (ICC) and called on the Government of Sudan and all other parties to the conflict in Darfur to cooperate with the ICC.

Following the UNSC resolutions and intense international pressure, the Darfur rebel groups and the Government of Sudan resumed negotiations in Abuja, Nigeria in early 2006. On May 5, 2006, the government and an SLM/A faction led by Minni Minawi signed the Darfur Peace Agreement (DPA). Unfortunately, the conflict in Darfur intensified shortly thereafter, led by rebel groups who refused to sign. In late August government forces began a major offensive on rebel areas in Northern Darfur. On August 30, the Security Council adopted UNSCR 1706, authorizing the transition of AMIS to a larger more robust UN peacekeeping operation. To further facilitate an end to the conflict in Darfur, President Bush announced the appointment of Andrew S. Natsios as the Special Envoy for Sudan on September 19, 2006.

In an effort to resolve Sudan’s opposition to a UN force, UN Secretary General Kofi Annan and African Union Commission Chair Alpha Oumar Konare convened a meeting of key international officials and representatives of several African and Arab states in Addis Ababa on November 16, 2006. The agreement reached with the Government of Sudan provided for graduated UN support to AMIS culminating in the establishment of a joint ‘hybrid” AU-UN peacekeeping operation in Darfur.

International efforts in 2007 focused on rallying support for DPA signatory and non-signatory rebel movements to attend renewed peace talks, and on finalizing plans for the joint AU/UN hybrid operation. UN Security Council Resolution 1769 was adopted on July 31, 2007, providing the mandate for a joint AU/UN hybrid force to deploy to Darfur with troop contributions from African countries. The UN African Mission in Darfur (UNAMID) was to assume authority from AMIS in the field no later than December 31, 2007.

Following the passage of UNSCR 1769, a conference was held August 3-5 in Arusha, Tanzania between key UN and AU officials and delegates from Darfur rebel groups. Many movements’ political and military leaderships were brought into the discussion in preparation for earnest peace talks. Peace talks between the Government of Sudan and rebel factions took place in Sirte, Libya on October 27, 2007. However, limited rebel participation and continuing disagreement about objectives and processes limited the effectiveness of these talks. Following the Sirte talks, the SPLM hosted workshops in Juba, Southern Sudan, to unite the rebel groups and allow them to come together to present a common front during negotiations. The Juba talks led to a consolidation of rebel factions down to five groups from an estimated 27. The U.S. continues to support the efforts of the UN and AU to host workshops for the rebel groups as a foundation for future negotiations. On December 21, 2007 President Bush announced the appointment of Ambassador Richard S. Williamson as Special Envoy for Sudan, following the resignation of Andrew S. Natsios.

On July 14, 2008 the Chief Prosecutor of the International Criminal Court (ICC), Luis Moreno-Ocampo, announced that he was seeking an arrest warrant for President Bashir for allegedly masterminding genocide, war crimes, and crimes against humanity in Darfur. On March 4, 2009 the ICC announced that it was issuing an arrest warrant for President Bashir for crimes against humanity and war crimes. The three-judge panel that issued the warrant did not feel there was enough evidence to include the crime of genocide on the warrant. However, should new information come to light, the charges can be amended. The mandate for UNAMID was renewed in mid-2008; however, the U.S. abstained on this resolution because it contained a reference to a possible deferral of consideration of Bashir’s case under Article 16 of the Rome Statute, language inserted at the behest of the Government of Sudan by its UN Security Council allies. In order to move quickly to find a solution to the violence in Darfur under the pressure of a possible ICC indictment, Sudan opened the Sudan People’s Initiative in October 2008. The conference brought together many Darfur rebel groups with the government for a conference to explore solutions and how to better implement the existing framework of the DPA. It culminated in the announcement of a unilateral Darfur ceasefire, which was reportedly violated within days of the declaration. Talks in Doha, Qatar, between the Government of Sudan and several Darfuri rebel groups, most notably JEM, began in early 2009. The Doha talks have thus far produced an agreement of goodwill and confidence-building between JEM and the Government of Sudan. In Addis Ababa in August 2009, four of the Darfur rebel groups reached agreement to unify politically, following a week-long forum arranged by the United States. By November 2009, eight Darfur rebel movements were committed to political unification, and Djibril Bassolé, African Union-United Nations Joint Chief Mediator, had commenced planning for the resumption of talks in Doha in mid-November, following a civil society workshop and consultations with the various rebel movements.

Humanitarian Situation
Sudan continues to cope with the countrywide effects of conflict, displacement, and insecurity. During more than 20 years of conflict between the Government of Sudan and the Sudan People's Liberation Movement/Army (SPLM/A), violence, famine, and disease killed more than 2 million people, forced an estimated 600,000 people to seek refuge in neighboring countries, and displaced approximately 4 million others within Sudan, creating the world's largest population of internally displaced people. Since the 2005 signing of the Comprehensive Peace Agreement (CPA), which officially ended the North-South conflict, the UN estimates that nearly 2 million displaced people have returned to Southern Sudan and the Three Areas of Southern Kordofan, Blue Nile, and Abyei. As of September 2009, the UN estimates that Lord’s Resistance Army (LRA)-related violence had displaced approximately 85,000 people in Southern Sudan, including more than 18,000 refugees from the Democratic Republic of the Congo and the Central African Republic. In addition, inter-ethnic conflict in Jonglei, Upper Nile, and Lakes states has killed more than 2,000 people and displaced approximately 250,000 individuals since January 2009.

In March 2009, following the ICC’s issuance of the arrest warrant for Bashir, the Government of Sudan expelled 13 international humanitarian aid organizations from Sudan and shut down three national aid organizations in a decision it publicly claimed was “long-overdue.” These organizations served as U.S. Government and UN implementing partners for the provision of, among other services, water and sanitation, health care, and protection, and their forced departure, according to the UN, affects 50% of aid delivery in Sudan. In the absence of expelled non-governmental organizations (NGOs), UN agencies and remaining NGOs stepped in to fill some of the critical gaps and address immediate humanitarian needs. The UN, the United States, and other members of the international community have since urged the Government of Sudan to reverse its decision on the expulsions, to identify and respond to gaps in life-saving operations, and to facilitate an orderly transition to working through the remaining NGOs. On March 18, 2009 President Barack Obama announced the appointment of Major General (Ret.) J. Scott Gration as the U.S. Special Envoy to Sudan. Special Envoy Gration negotiated with the Government of Sudan to allow the entry of four new NGOs to help address the humanitarian gaps. The Government of Sudan is cooperating regarding the loosening of some administrative and bureaucratic impediments that hindered the fast and effective delivery of humanitarian assistance in the past.

The conflict in the western region of Darfur entered its sixth year in 2009, despite a 2006 peace agreement--the Darfur Peace Agreement (DPA)--between the Government of National Unity and one faction of the Sudan Liberation Army, that of Minni Minawi. Fighting among armed opposition group factions, the Sudanese Armed Forces, and militias continues, displacing hundreds of thousands of civilians--230,000 since January 2008 alone. The complex emergency in Darfur affects approximately 4.2 million people, including more than 2.5 million internally displaced people in both Sudan and Chad.

The U.S. Government is the leading international donor to Sudan and has contributed more than $5 billion in humanitarian, development, peacekeeping, and reconstruction assistance for the people in Sudan and eastern Chad since 2005, including more than $1 billion in FY 2007 alone. The U.S. Mission in Sudan has declared disasters due to the complex emergency on an annual basis since 1987. On October 1, 2009, President Obama renewed the Sudan complex emergency disaster declaration for FY 2010. The U.S. Government continues to lead the international effort to support implementation of the CPA, while providing for the humanitarian needs of conflict-affected populations throughout the country. U.S. Government humanitarian assistance to Sudan includes food aid, provision of health care, water, sanitation, and hygiene, as well as programs for nutrition, agriculture, protection, and economic recovery.

Principal Government Officials
President, Prime Minister, and Commander in Chief of the Armed Forces--Lt. Gen. Omar Hassan Ahmed al-Bashir
First Vice President--Salva Kiir
Vice President--Ali Osman Muhamad Taha
Foreign Minister--Deng Alor Kuol
Ambassador to the U.S.--Sudan is represented by Charge d'Affaires Akec Khoc Aciew Khoc
Ambassador to the UN--Abdalmahmood Abdalhaleem Mohamed

Sudan maintains an embassy in the United States at 2210 Massachusetts Ave. NW, Washington, DC 20008 (tel: (202) 338-8565; fax: (202) 667-2406); and a Consular Office at 2612 Woodley Place, NW, Washington, DC 20008 (tel: (202) 232-1492; fax: (202) 232-1494).

The regional Government of Southern Sudan maintains a liaison office in the United States at 1233 20th St. NW, Suite 602, Washington, DC 20036 (tel: (202) 293-7940; fax: (202) 293-7941).

ECONOMY
In 2004, the cessation of major north-south hostilities and expanding crude oil exports resulted in 6.4% GDP growth and a near doubling of GDP per capita since 2003. The aftereffects of the 21-year civil war and very limited infrastructure, however, present obstacles to stronger growth and a broader distribution of income. The country continued taking some steps toward transitioning from a socialist to a market-based economy, although the government and governing party supporters remained heavily involved in the economy.

Sudan’s primary resources are agricultural, but oil production and export have taken on greater importance since October 2000. Although the country is trying to diversify its cash crops, cotton, and gum arabic remain its major agricultural exports. Grain sorghum (dura) is the principal food crop, and millet and wheat are grown for domestic consumption. Sesame seeds and peanuts are cultivated for domestic consumption and increasingly for export. Livestock production has vast potential, and many animals, particularly camels and sheep, are exported to Egypt, Saudi Arabia, and other Arab countries. However, Sudan remains a net importer of food. Problems of irrigation and transportation remain the greatest constraints to a more dynamic agricultural economy.

The country’s transportation facilities consist of 5,978 kilometers of railways, 16 airports with paved runways, and about 11,900 kilometers of paved and gravel road--primarily in greater Khartoum, Port Sudan, and the north. Some north-south roads that serve the oil fields of central/south Sudan have been built; and a 1,400 kilometer. (840 miles) oil pipeline goes from the oil fields via the Nuba Mountains and Khartoum to the oil export terminal in Port Sudan on the Red Sea.

Sudan’s limited industrial development consists of agricultural processing and various light industries located in Khartoum North. In recent years, the GIAD industrial complex introduced the assembly of small autos and trucks, and some heavy military equipment such as armored personnel carriers and the proposed "Bashir" main battle tank. Although Sudan is reputed to have great mineral resources, exploration has been quite limited, and the country’s real potential is unknown. Small quantities of asbestos, chromium, and mica are exploited commercially.

Extensive petroleum exploration began in the mid-1970s and might cover all of Sudan’s economic and energy needs. Significant finds were made in the Upper Nile region and commercial quantities of oil began to be exported in October 2000, reducing Sudan’s outflow of foreign exchange for imported petroleum products. There are indications of significant potential reserves of oil and natural gas in southern Sudan, the Kordofan region and the Red Sea province.

Historically, the U.S., the Netherlands, Italy, Germany, Saudi Arabia, Kuwait, and other Organization of Petroleum Exporting Countries (OPEC) have supplied most of Sudan’s economic assistance. Sudan’s role as an economic link between Arab and African countries is reflected by the presence in Khartoum of the Arab Bank for African Development. The World Bank had been the largest source of development loans.

Sudan will require extraordinary levels of program assistance and debt relief to manage a foreign debt exceeding $21 billion, more than the country’s entire annual gross domestic product. During the late 1970s and 1980s, the International Monetary Fund (IMF), World Bank, and key donors worked closely to promote reforms to counter the effect of inefficient economic policies and practices. By 1984, a combination of factors--including drought, inflation, and confused application of Islamic law--reduced donor disbursements, and capital flight led to a serious foreign-exchange crisis and increased shortages of imported inputs and commodities. More significantly, the 1989 revolution caused many donors in Europe, the U.S., and Canada to suspend official development assistance, but not humanitarian aid.

However, as Sudan became the world’s largest debtor to the World Bank and IMF by 1993, its relationship with the international financial institutions soured in the mid-1990s and has yet to be fully rehabilitated. The government fell out of compliance with an IMF standby program and accumulated substantial arrearages on repurchase obligations. A 4-year economic reform plan was announced in 1988 but was not pursued. An economic reform plan was announced in 1989 and implementation began on a 3-year economic restructuring program designed to reduce the public sector deficit, end subsidies, privatize state enterprises, and encourage new foreign and domestic investment. In 1993, the IMF suspended Sudan’s voting rights and the World Bank suspended Sudan’s right to make withdrawals under effective and fully disbursed loans and credits. Lome Funds and European Union agricultural credits, totaling more than 1 billion euros, also were suspended.

Sudan produces about 401,000 barrels per day (b/d) (2005 est.) of oil, which brought in about $1.9 billion in 2005 and provides 70% of the country’s total export earnings. Although final figures are not yet available, these earnings may have risen to an estimated $2 billion as of the end of 2004. Oil production in Sudan as of 2007 was at 466,100 barrels of oil a day. With a resolution of its 21-year civil war between the North and South, Sudan and its people can now begin to reap the benefit from its natural resources, rebuild its infrastructure, increase oil production and exports, and be able to attain its export and development potential.

In 2000-2001, Sudan’s current account entered surplus for the first time since independence. In 1993, currency controls were imposed, making it illegal to possess foreign exchange without approval. In 1999, liberalization of foreign exchange markets ameliorated this constraint somewhat. Exports other than oil are largely stagnant. The small industrial sector remains in the doldrums, and Sudan’s inadequate and declining infrastructure inhibits economic growth.

DEFENSE
The Sudan People’s Armed Forces is a 100,000-member army supported by a small air force and navy. Irregular tribal and former rebel militias and Popular Defense Forces supplement the army’s strength in the field. This is a mixed force, having the additional duty of maintaining internal security. During the 1990s, periodic purges of the professional officer corps by the ruling Islamist regime eroded command authority as well as war-fighting capabilities. Indeed, the Sudanese Government admitted it was incapable of carrying out its war aims against the SPLA without employing former rebel and Arab militias to fight in support of regular troops. Additionally, as mandated in the CPA, the Southern Sudanese maintain their own armed forces in the form of the SPLA.

Sudan’s military forces historically have been hampered by limited and outdated equipment. In the 1980s, the U.S. worked with the Sudanese Government to upgrade equipment with special emphasis on airlift capacity and logistics. All U.S. military assistance was terminated following the military coup of 1989. Oil revenues have allowed the government to purchase modern weapons systems, including Hind helicopter gunships, Antonov medium bombers, MiG 23 fighter aircraft, mobile artillery pieces, and light assault weapons. Sudan now receives most of its military equipment from China, Russia, and Libya.

The Sudan People’s Liberation Army (SPLA) in southern Sudan is currently in the process of transformation from a guerrilla force to a professional military organization.

FOREIGN RELATIONS
Solidarity with other Arab countries has been a feature of Sudan’s foreign policy. When the Arab-Israeli war began in June 1967, Sudan declared war on Israel. However, in the early 1970s, Sudan gradually shifted its stance and was supportive of the Camp David Accords.

Relations between Sudan and Libya deteriorated in the early 1970s and reached a low in October 1981, when Libya began a policy of cross-border raids into western Sudan. After the 1985 coup in Sudan, the military government resumed diplomatic relations with Libya, as part of a policy of improving relations with neighboring and Arab states. In early 1990, Libya and the Sudan announced that they would seek "unity," but this unity was not implemented.

During the 1990s, as Sudan sought to steer a nonaligned course, courting Western aid and seeking rapprochement with Arab states, its relations with the U.S. grew increasingly strained. Sudan’s ties with countries like North Korea and Libya and its support for regional insurgencies such as Egyptian Islamic Jihad, Eritrean Islamic Jihad, Ethiopian Islamic Jihad, Palestinian Islamic Jihad, Hamas, Hezbollah, and the Lord’s Resistance Army generated great concern about its contribution to regional instability. Allegations of the government’s complicity in the assassination attempt against the Egyptian President in Ethiopia in 1995 led to UNSC sanctions against the Sudan. By the late 1990s, Sudan experienced strained or broken diplomatic relations with most of its nine neighboring countries. However, since 2000, Sudan has actively sought regional rapprochement that has rehabilitated most of these relations.

U.S.-SUDANESE RELATIONS
Sudan broke diplomatic relations with the U.S. in June 1967, following the outbreak of the Arab-Israeli War. Relations improved after July 1971, when the Sudanese Communist Party attempted to overthrow President Nimeiri, and Nimeiri suspected Soviet involvement. U.S. assistance for resettlement of refugees following the 1972 peace settlement with the south added further improved relations.

On March 1, 1973, Palestinian terrorists of the "Black September" organization murdered U.S. Ambassador Cleo A. Noel and Deputy Chief of Mission Curtis G. Moore in Khartoum. Sudanese officials arrested the terrorists and tried them on murder charges. In June 1974, however, they were released to the custody of the Egyptian Government. The U.S. Ambassador to the Sudan was withdrawn in protest. Although the U.S. Ambassador returned to Khartoum in November, relations with the Sudan remained static until early 1976, when President Nimeiri mediated the release of 10 American hostages being held by Eritrean insurgents in rebel strongholds in northern Ethiopia. In 1976, the U.S. decided to resume economic assistance to the Sudan.

In late 1985, there was a reduction in staff at the U.S. Embassy in Khartoum because of the presence in Khartoum of a large contingent of Libyan terrorists. In April 1986, relations with Sudan deteriorated when the U.S. bombed Tripoli, Libya. A U.S. Embassy employee was shot on April 16, 1986. Immediately following this incident, all non-essential personnel and all dependents left for six months. At this time, Sudan was the single largest recipient of U.S. development and military assistance in sub-Saharan Africa. However, official U.S. development assistance was suspended in 1989 in the wake of the military coup against the elected government, which brought to power the National Islamist Front led by General Bashir.

U.S. relations with Sudan were further strained in the 1990s. Sudan backed Iraq in its invasion of Kuwait and provided sanctuary and assistance to Islamic terrorist groups. In the early and mid-1990s, Carlos the Jackal, Osama bin Laden, Abu Nidal, and other terrorist leaders resided in Khartoum. Sudan’s role in the radical Pan-Arab Islamic Conference represented a matter of great concern to the security of American officials and dependents in Khartoum, resulting in several draw downs and/or evacuations of U.S. personnel from Khartoum in the early-mid 1990s. Sudan’s Islamist links with international terrorist organizations represented a special matter of concern for the U.S. Government, leading to Sudan's 1993 designation as a state sponsor of terrorism and a suspension of U.S. Embassy operations in Khartoum in 1996. In October 1997, the U.S. imposed comprehensive economic, trade, and financial sanctions against the Sudan. In August 1998, in the wake of the East Africa embassy bombings, the U.S. launched cruise missile strikes against Khartoum. The last U.S. Ambassador to the Sudan, Ambassador Tim Carney, departed post prior to this event and no new ambassador has been designated since. The U.S. Embassy is headed by a Charge d’Affaires. The Embassy continues to re-evaluate its posture in Sudan, particularly in the wake of the January 1, 2008, killings of a U.S. Agency for International Development (USAID) employee and his Sudanese driver in Khartoum.

The U.S. and Sudan entered into a bilateral dialogue on counter-terrorism in May 2000. Sudan has provided concrete cooperation against international terrorism since the September 11, 2001, terrorism strikes on New York and Washington. However, although Sudan publicly supported the international coalition actions against the al Qaida network and the Taliban in Afghanistan, the government criticized the U.S. strikes in that country and opposed a widening of the effort against international terrorism to other countries. Sudan remains on the state sponsors of terrorism list.

In response to the Government of Sudan’s continued complicity in unabated violence occurring in Darfur, President Bush imposed new economic sanctions on Sudan in May 2007. The sanctions blocked assets of Sudanese citizens implicated in Darfur violence, and also sanctioned additional companies owned or controlled by the Government of Sudan. Sanctions continue to underscore U.S. efforts to end the suffering of the millions of Sudanese affected by the crisis in Darfur.

Despite policy differences the U.S. has been a major donor of humanitarian aid to the Sudan throughout the last quarter century. The U.S. was a major donor in the March 1989 "Operation Lifeline Sudan," which delivered 100,000 metric tons of food into both government and SPLA-held areas of the Sudan, thus averting widespread starvation. In 1991, the U.S. made major donations to alleviate food shortages caused by a two-year drought. In a similar drought in 2000-01, the U.S. and the international community responded to avert mass starvation in the Sudan. In 2001 the Bush administration named a presidential envoy for peace in the Sudan to explore what role the U.S. could play in ending Sudan's civil war and enhancing the delivery of humanitarian aid. Andrew Natsios and subsequently Ambassador Richard Williamson served as presidential envoys to Sudan during the Bush administration. On March 18, 2009 President Barack Obama announced the appointment of Major General (Ret.) J. Scott Gration as the U.S. Special Envoy to Sudan.

On October 19, 2009, Secretary of State Hillary Rodham Clinton, accompanied by Special Envoy Gration and U.S. Ambassador to the United Nations Susan Rice, announced the Obama administration’s new Sudan strategy. U.S. strategy in Sudan is comprised of three core principles: 1) Achieving a definitive end to conflict, gross human rights abuses, and genocide in Darfur; 2) Implementation of the North-South Comprehensive Peace Agreement (CPA) that results in a peaceful post-2011 Sudan, or an orderly path toward two separate and viable states at peace with each other; and 3) Ensuring that Sudan does not provide a safe haven for international terrorists.

Principal U.S. Officials
Ambassador--vacant
Charge d'Affaires--Robert E. Whitehead
Deputy Chief of Mission--Mark Asquino
USAID Director--Bill Hammink
Political-Economic Chief--Helen C. Hudson
Public Affairs Officer--Judith Ravin

The U.S. Embassy in Sudan is located at Shari’a Ali Abdul Latif, P.O. Box 699, Khartoum (tel. 249-11-774-700; 774-704). Hours are 8 a.m. to 4:30 p.m. Sunday through Thursday.

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.

Background Notes : Congo (Brazzaville) (11/09)

Tue, 10 Nov 2009 14:02:10 EDT

Background Note: Republic of the Congo

November 2009

Bureau of African Affairs

Men steer a boat across the Congo river near Brazzaville, Republic of the Congo. November 5, 2006. [© AP Images]

PROFILE

OFFICIAL NAME:
Republic of the Congo

Geography
Area: 342,000 sq. km (132,000 sq. mi.); slightly larger than New Mexico.
Cities: Capital--Brazzaville (pop. 800,000). Other cities--Pointe-Noire (450,000), Dolisie (150,000).
Climate: Tropical. Tropical jungle in the North (country seasonally split--half lies above the Equator; half below the Equator).
Terrain: Coastal plains, fertile valleys, central plateau, forested flood plains.

People
Nationality: Noun and adjective--Congolese (sing. and pl.).
Population (July 2009 est.): 4,012,809.
Annual growth rate (2008 est.): 2.754%.
Ethnic groups: 15 principal Bantu groups; more than 70 subgroups. Largest groups are Bacongo, Vili, Bateke, M'Bochi, and Sangha. Also present is a small population (less than 100,000) of Pygmies, ethnically unrelated to the Bantu majority.
Religions: Traditional beliefs 50%, Roman Catholic 35%, other Christian 15%, Muslim 2%.
Languages: French (official), Lingala and Munukutuba (national).
Health: Infant mortality rate (2008 est.)--79.78 deaths/1,000 live births. Life expectancy (2009 est.)--54.15 yrs.
Work force: About 40% of population, two-thirds of whom work in agriculture.

Government
Type: Republic.
Independence: August 15, 1960.
Constitution: New constitution adopted in nationwide referendum on January 20, 2002.
Branches: Executive--president (chief of state), Council of Ministers (cabinet). Legislative--bicameral legislature made up of a Senate and a National Assembly. Judicial--Supreme Court, Court of Accounts and Budgetary Discipline, Courts of Appeal (Title VIII of the 2002 constitution), and the Constitutional Court (Title IX of the 2002 constitution). Other--Economic Council and Human Rights Commission.
Administrative subdivisions: 10 departments, divided into districts, plus the capital district.
Political parties: More than 100 new parties formed (but not all function) since multi-party democracy was introduced in 1990. The largest are the Pan-African Union for Social Democracy (UPADS), Congolese Labor Party (PCT), Congolese Movement for Democracy and Integral Development (MCDDI), Coalition for Democracy and Social Progress (RDPS), Coalition for Democracy and Development (RDD), Union of Democratic Forces (UFD), Union of Democratic Renewal (URD), Union for Development and Social Progress (UDPS). Following the June-October 1997 war and the 1998-99 civil conflict, many parties, including UPADS and MCDDI, were left in disarray as their leadership fled the country. By 2007, many of the leaders had returned, with the notable exception of former President Pascal Lissouba.
Suffrage: Universal adult.

Economy
GDP (2008 est.): $15.6 billion.
Real GDP growth rate (2008 est.): 5.6%
Per capita income (2008 est.): $4,000.
Inflation (2008 est.): 5%.
Natural resources: Petroleum, wood, potash, lead, zinc, uranium, phosphates, natural gas, hydropower.
Structure of production (2001): Government and services--40.3%; petroleum sector--38.9%; agriculture and forestry--10.5%; utilities and industry--6.0%; other--4.3%.
Agriculture: Products--manioc, sugar, rice, corn, peanuts, vegetables, coffee, cocoa, forest products. Land--less than 2% cultivated.
Trade (2008 est.): Exports--$9.009 billion (f.o.b.): petroleum (89% of export earnings), lumber, plywood, sugar, cocoa, coffee, diamonds. Exports to the U.S. (2007 est.)--$3.099 billion. Imports--$2.722 billion (f.o.b.): capital equipment, construction materials, foodstuffs. Imports from the U.S. (2007 est.)--$140 million.

PEOPLE
Congo's sparse population is concentrated in the southwestern portion of the country, leaving the vast areas of tropical jungle in the north virtually uninhabited. Thus, Congo is one of the most urbanized countries in Africa, with 70% of its total population living in Brazzaville, Pointe-Noire, or along the 332-mile railway that connects them. In southern rural areas, industrial and commercial activity suffered as a consequence of the civil wars in the late 1990s. Except in Kouilou province and Pointe Noire, commercial activity other than subsistence activity came nearly to a halt. A slow recovery began in 2000 and continued in 2008.

Before the 1997 war, about 9,000 Europeans and other non-Africans lived in Congo, most of whom were French. Only a fraction of this number remains. The number of American citizens residing in Congo typically hovers around 300.

HISTORY
First inhabited by Pygmies, Congo was later settled by Bantu groups that also occupied parts of present-day Angola, Gabon, and Democratic Republic of the Congo (formerly Zaire), forming the basis for ethnic affinities and rivalries among those states. Several Bantu kingdoms--notably those of the Kongo, the Loango, and the Teke--built trade links leading into the Congo River basin. The first European contacts came in the late 15th century, and commercial relationships were quickly established with the kingdoms--trading for slaves captured in the interior. The coastal area was a major source for the transatlantic slave trade, and when that commerce ended in the early 19th century, the power of the Bantu kingdoms eroded.

The area came under French sovereignty in the 1880s. Pierre Savorgnon de Brazza, a French empire builder, competed with agents of Belgian King Leopold's International Congo Association (later Zaire) for control of the Congo River basin. Between 1882 and 1891, treaties were secured with all the main local rulers on the river's right bank, placing their lands under French protection. In 1908, France organized French Equatorial Africa (AEF), comprising its colonies of Middle Congo (modern Congo), Gabon, Chad, and Oubangui-Chari (modern Central African Republic). Brazzaville was selected as the federal capital.

Economic development during the first 50 years of colonial rule in Congo centered on natural resource extraction by private companies. In 1924-34, the Congo-Ocean Railway (CFCO) was built at a considerable human and financial cost, opening the way for growth of the ocean port of Pointe-Noire and towns along its route.

During World War II, the AEF administration sided with Charles DeGaulle, and Brazzaville became the symbolic capital of Free France during 1940-43. The Brazzaville Conference of 1944 heralded a period of major reform in French colonial policy, including the abolition of forced labor, granting of French citizenship to colonial subjects, decentralization of certain powers, and election of local advisory assemblies. Congo benefited from the postwar expansion of colonial administrative and infrastructure spending as a result of its central geographic location within AEF and the federal capital at Brazzaville.

The Loi Cadre (framework law) of 1956 ended dual voting roles and provided for partial self-government for the individual overseas territories. Ethnic rivalries then produced sharp struggles among the emerging Congolese political parties and sparked severe riots in Brazzaville in 1959. After the September 1958 referendum approving the new French Constitution, AEF was dissolved. Its four territories became autonomous members of the French Community, and Middle Congo was renamed the Congo Republic. Formal independence was granted in August 1960.

Congo's first President was Fulbert Youlou, a former Catholic priest from the Pool region in the southeast. He rose to political prominence after 1956, and was narrowly elected President by the National Assembly at independence. Youlou's 3 years in power were marked by ethnic tensions and political rivalry. In August 1963, Youlou was overthrown in a 3-day popular uprising (Les Trois Glorieuses) led by labor elements and joined by rival political parties. All members of the Youlou government were arrested or removed from office. The Congolese military took charge of the country briefly and installed a civilian provisional government headed by Alphonse Massamba-Debat. Under the 1963 constitution, Massamba-Debat was elected President for a 5-year term and named Pascal Lissouba to serve as Prime Minister. However, President Massamba-Debat's term ended abruptly in August 1968, when Capt. Marien Ngouabi and other army officers toppled the government in a coup. After a period of consolidation under the newly formed National Revolutionary Council, Major Ngouabi assumed the presidency on December 31, 1968. One year later, President Ngouabi proclaimed Congo to be Africa's first "people's republic" and announced the decision of the National Revolutionary Movement to change its name to the Congolese Labor Party (PCT).

On March 18, 1977, President Ngouabi was assassinated. Although the persons accused of shooting Ngouabi were tried and some of them executed, the motivation behind the assassination is still not clear. An 11-member Military Committee of the Party (CMP) was named to head an interim government with Colonel (later General) Joachim Yhomby-Opango to serve as President of the Republic. Accused of corruption and deviation from party directives, Yhomby-Opango was removed from office on February 5, 1979, by the Central Committee of the PCT, which then simultaneously designated Vice President and Defense Minister Col. Denis Sassou-Nguesso as interim President. The Central Committee directed Sassou-Nguesso to take charge of preparations for the Third Extraordinary Congress of the PCT, which proceeded to elect him President of the Central Committee and President of the Republic. Under a congressional resolution, Yhomby-Opango was stripped of all powers, rank, and possessions and placed under arrest to await trial for high treason. He was released from house arrest in late 1984 and ordered back to his native village of Owando.

After two decades of turbulent politics bolstered by Marxist-Leninist rhetoric, and with the collapse of the Soviet Union, the Congolese gradually moderated their economic and political views to the point that, in 1992, Congo completed a transition to multi-party democracy. Ending a long history of one-party Marxist rule, a specific agenda for this transition was laid out during Congo's national conference of 1991 and culminated in August 1992 with multi-party presidential elections. Sassou-Nguesso conceded defeat and Congo's new President, Prof. Pascal Lissouba, was inaugurated on August 31, 1992.

Congolese democracy experienced severe trials in 1993 and early 1994. President Lissouba dissolved the National Assembly in November 1992, calling for new elections in May 1993. The results of those elections were disputed, touching off violent civil unrest in June and again in November. In February 1994, all parties accepted the decisions of an international board of arbiters, and the risk of large-scale insurrection subsided.

However, Congo's democratic progress was derailed in 1997. As presidential elections scheduled for July 1997 approached, tensions between the Lissouba and Sassou-Nguesso camps mounted. When President Lissouba's government forces surrounded Sassou-Nguesso's compound in Brazzaville with armored vehicles on June 5, Sassou-Nguesso ordered his militia to resist. Thus began a 4-month conflict that destroyed or damaged much of Brazzaville. In early October, Angolan troops invaded Congo on the side of Sassou-Nguesso and, in mid-October, the Lissouba government fell. Soon thereafter, Sassou-Nguesso declared himself President and named a 33-member government.

In January 1998, the Sassou-Nguesso regime held a National Forum for Reconciliation to determine the nature and duration of the transition period. The forum, tightly controlled by the government, decided elections should be held in about 3 years, elected a transition advisory legislature, and announced that a constitutional convention would finalize a draft constitution. However, the eruption in late 1998 of fighting between Sassou-Nguesso's government forces and a pro-Lissouba and pro-Kolelas armed opposition disrupted the transition to democracy. This new violence also closed the economically vital Brazzaville-Pointe Noire railroad, caused great destruction and loss of life in southern Brazzaville and in the Pool, Bouenza, and Niari regions, and displaced hundreds of thousands of persons. In November and December 1999, the government signed agreements with representatives of many, though not all, of the rebel groups.

The December accord, mediated by President Omar Bongo of Gabon, called for follow-on, inclusive political negotiations between the government and the opposition. During the years 2000-2001, Sassou-Nguesso's government conducted a national dialogue (Dialogue Sans Exclusif), in which the opposition parties and the government agreed to continue on the path to peace. Ex-President Lissouba and ex-Prime Minister Kolelas refused to agree and were exiled. They were tried in absentia and convicted in Brazzaville of charges ranging from treason to misappropriation of government funds. Ex-militiamen were granted amnesty, and many were provided micro-loans to aid their reintegration into civil society. Not all opposition members participated. One group, referred to as "Ninjas," actively opposed the government in a low-level guerrilla war in the Pool region of the country. Other members of opposition parties have returned and have opted to participate to some degree in political life.

A new constitution was drafted in 2001, approved by the provisional legislature (National Transition Council), and approved by the people of Congo in a national referendum in January 2002. Presidential elections were held in March 2002, and Sassou-Nguesso was declared the winner. Legislative elections were held in May and June 2002. In March 2003 the government signed a peace accord with the Ninjas, and the country has remained stable and calm since the signing. Internally displaced persons are returning to the Pool region. President Sassou-Nguesso allowed Kolelas to return to Congo for his wife's funeral in October 2005 and subsequently asked that Parliament grant Kolelas amnesty. Parliament complied with Sassou-Nguesso's request in December 2005.

In 2007, Sassou-Nguesso announced he would allow the return of former president Pascal Lissouba, along with a pardon for the 2001 in absentia conviction for “economic crimes” for which Lissouba had been sentenced to 30 years. By October 2009, Lissouba had still not returned to the country. Now a health condition requiring regular treatment not available in Brazzaville seems to be the only real obstacle to his return. Former prime minister Joachim Yhombi-Opango returned to the country in August 2007 after the Council of Ministers granted him amnesty in May for a 2001 conviction in absentia for allegedly improperly selling the country’s oil while in office. Legislative elections were held in June and August 2007 and were widely viewed as disorganized and marred by irregularities, with low voter turnout. Presidential elections were held in July 2009, and Sassou-Nguesso was declared the winner.

GOVERNMENT AND POLITICAL CONDITIONS
Before the 1997 war, the Congolese system of government was similar to that of the French. However, after taking power, Sassou-Nguesso suspended the constitution approved in 1992 upon which this system was based. The 2002 constitution provides for a 7-year presidential term, limited to a maximum of two sequential terms. There is a parliament of two houses, whose members serve for 5 years.

Principal Government Officials
President--Denis Sassou-Nguesso
Minister of State, Coordinator of the pole of Basic Infrastructure, in charge of Transport, Civil Aviation and Maritime Shipping--Isidore Mvoumba
Minister of State, Coordinator of the Economical pole, in charge of the Economy, Government Planning, Land Reform and Integration--Pierre Moussa
Minister of State, Coordinator of the Sovereignty pole, in charge of Justice and Human Rights, and Keeper of the Great Seal--Aimé Emmanuel Yoka
Minister of State, Coordinator of the Socio-cultural pole, in charge of Labor and Social Security--Florent Tsiba
Minister of Foreign Affairs and Relations with Francophone Countries--Basile Ikouebe
Minister of Economy, Finance and Budget--Pacifique Issoibeka
Ambassador to the United States--Serge Mombouli
Ambassador to the United Nations--Serge Balle

The Congo maintains an embassy in the United States at 4891 Colorado Avenue, NW, Washington, DC 20011 (tel: 202-726-5500). The Congolese Mission to the United Nations is at 14 East 65th Street, New York, NY 10021 (tel: 212-744-7840).

ECONOMY
The Congo's economy is based primarily on its petroleum sector, which is by far the country's major revenue earner. The Congolese oil sector is dominated by the French oil company Total. In second position is the Italian oil firm ENI. The two American players in the petroleum production sector are Chevron and Murphy Oil. Chevron is a longtime player in the Congolese market, but they play a limited role in 30-70 non-operator joint venture partnership with Total. Chevron finances Total’s projects, but is not currently involved in exploration or production. Murphy Oil exported its first shipment of 600,000 barrels of oil in October 2009 and is currently producing 15,000 barrels per day, or about 5% of Congo’s daily production. American companies including Baker-Hughes, Halliburton, Nabors, Schlumberger, and Weatherford also have an important stake in the oil services sector. The return of stability to Congo is also leading to increased foreign investment in other areas. President Sassou-Nguesso sees the industrialization of the Congo as a key component of his plan to modernize Congo. Mineral extraction is one key growth sector. MagMinerals, a Canadian company, recently began construction of a new potash mine that is expected to produce 1.2 million tons of potash per year by 2013. This will make Congo the largest producer of potash in Africa. The President’s plans also call for new lead, zinc, and copper concessions. There are also plans in the works to revitalize Congo’s agricultural sector, through a long-term land lease agreement of some 100-200,000 hectares of idle farmland to a consortium of South African farmers.

The country's abundant northern rain forests are the source of timber. Forestry, which led Congolese exports before the discovery of oil, now generates less than 7% of export earnings. Wood production came to a standstill during the war years but has recommenced, and new concessions were leased in 2001.

Earlier in the 1990s, Congo's major employer was the state bureaucracy, which had 80,000 employees on its payroll--enormous for a country of Congo's size. The World Bank and other international financial institutions pressured Congo to institute sweeping civil service reforms in order to reduce the size of the state bureaucracy and pare back a civil service payroll that amounted to more than 20% of GDP in 1993. The effort to cut back began in 1994 with a 50% devaluation that cut the payroll in half in dollar terms. By the middle of 1994, there was a reduction of nearly 8,000 in civil service employees.

Between 1994-1996, the Congolese economy underwent a difficult transition. The prospects for building the foundation of a healthy economy, however, were better than at any time in the previous 15 years. Congo took a number of measures to liberalize its economy, including reforming the tax, investment, labor, timber, and hydrocarbon codes. In 2002-2003 Congo privatized key parastatals, primarily banks, telecommunications, and transportation monopolies, to help improve a dilapidated and unreliable infrastructure.

By the end of 1996, Congo had made substantial progress in various areas targeted for reform. It made significant strides toward macroeconomic stabilization through improving public finances and restructuring external debt. This change was accompanied by improvements in the structure of expenditures, with a reduction in personnel expenditures. Further, Congo benefited from debt restructuring from a Paris Club agreement in July 1996.

This reform program came to a halt, however, in early June 1997 when war broke out, and the return of armed conflict in 1998-99 hindered economic reform and recovery. President Sassou-Nguesso has moved forward on improved governance, economic reforms, and privatization, as well as on cooperation with international financial institutions. President Sassou-Nguesso also has made speeches outlining the need for good governance and transparency in the Congo, particularly during his 2003 and 2004 National Day Addresses.

Before June 1997, Congo and the United States ratified a bilateral investment treaty designed to facilitate and protect foreign investment. The country also adopted a new investment code intended to attract foreign capital. The country has made some commendable efforts at political and economic reform, but despite these successes, Congo's investment climate has challenges, offering few meaningful incentives for new investors. High costs for labor, energy, raw materials, and transportation; a restrictive labor code; low productivity and high production costs; and a deteriorating transportation infrastructure have been among the factors discouraging investment. Five years of civil conflict (1997-2003) further damaged infrastructure, though the privatization of some statal and parastatal enterprises has generated some interest from U.S. companies.

In March 2006, the World Bank, International Monetary Fund (IMF), and the Paris Club group of official creditor countries approved interim debt relief for Congo under the Heavily Indebted Poor Countries (HIPC) Initiative, noting that Congo had performed satisfactorily on an IMF-supported reform program and developed an interim Poverty Reduction Strategy. Resources that are freed by interim debt relief granted to Congo must be used for poverty reduction under a reform program closely monitored by the international financial institutions. The London Club of commercial creditors and Congolese Government also signed an agreement in November 2007 forgiving 77% of the country’s London Club debt. In 2007, however, Congo’s reform program went off-track, leading the Paris Club and the international financial institutions to suspend their debt relief measures. The poverty reduction program has been marked by continued delays, and progress in 2008 was incremental at best. In late 2008, Congo re-engaged with the IMF and World Bank, paving the way for a new IMF program that the IMF Executive Board approved in December 2008 and a new Paris Club agreement with Congo that resumed interim debt relief.

Congo still needs to address serious concerns about governance and financial transparency in order to complete the HIPC Initiative process and qualify for additional debt cancellation. Specifically, Congo needs to reform its procurement code and the forestry sector and needs to improve petroleum sector transparency. The Congo Government continues to face lawsuits from companies who purchase the country’s debt at deep discounts on the secondary markets and then attempt to recover the full value of the debt through Western legal systems.

In November 2007, Congo was readmitted to the Kimberley Process, an international multi-stakeholder initiative designed to stem the trade of conflict diamonds. Congo had been suspended from the Kimberley Process in 2004 after reviews showed its diamond exports vastly outnumbered its production capacity. Congo’s government estimates current diamond capacity to be 5,000 carats, with a potential for 50,000 to 70,000 carats.

FOREIGN RELATIONS
For the two decades preceding Congo's 1991 national conference, the country was firmly in the socialist camp, allied principally with the Soviet Union and other Eastern bloc nations. Educational, economic, and foreign aid links between Congo and its Eastern bloc allies were extensive, with the Congolese military and security forces receiving significant Soviet, East German, and Cuban assistance.

France, the former colonial power, maintained a continuing but somewhat subdued relationship with Congo, offering a variety of cultural, educational, and economic assistance. The principal element in the French-Congolese relationship was the highly successful oil sector investment of the French petroleum parastatal Elf-Aquitaine (now called Total), which entered the Congo in 1968 and has continued to grow.

After the worldwide collapse of communism and Congo's adoption of multi-party democracy in 1991, Congo's bilateral relations with its former socialist allies became relatively less important. France is now by far Congo's principal external partner, contributing significant amounts of economic assistance, while playing a highly influential role. However, there is a growing interest in attracting American investors.

Congo is a member of the United Nations, African Union, African Development Bank, World Trade Organization (WTO), Central African Economic and Monetary Community (CEMAC), Central African Customs and Economic Union (UDEAC), International Coffee Organization, Economic Community of Central African States ECCAS/CEEAC), INTERPOL, the International Atomic Energy Agency (IAEA), the Nonaligned Movement, and the Group of 77. Congo held a seat on the United Nations Security Council during 2006-2007. In January 2006, President Sassou-Nguesso was elected for a one-year term as Chairman of the African Union.

U.S.-CONGOLESE RELATIONS
Diplomatic relations between the United States and Congo were broken during the most radical Congolese-Marxist period, 1965-77. The U.S. Embassy reopened in 1977 with the restoration of relations, which remained distant until the end of the socialist era. The late 1980s were marked by a progressive warming of Congolese relations with Western countries, including the United States. Congolese President Denis Sassou-Nguesso made a state visit to Washington in 1990, where he was received by President George H.W. Bush.

With the advent of democracy in 1991, Congo's relations with the United States improved and were cooperative. The United States has enthusiastically supported Congolese democratization efforts, contributing aid to the country's electoral process. The Congolese Government demonstrated an active interest in deepening and broadening its relations with the United States. Transition Prime Minister Andre Milongo made an official visit to Washington in 1992, where President Bush received him at the White House.

Then-presidential candidate Pascal Lissouba traveled to Washington in 1992, meeting with a variety of officials, including Assistant Secretary of State for African Affairs Herman J. Cohen. After his election in August 1992, President Lissouba expressed interest in expanding U.S.-Congo links, seeking increased U.S. development aid, university exchanges, and greater U.S. investment in Congo.

With the outbreak of the 1997 war, the U.S. Embassy was evacuated. The Embassy was closed, and its personnel became resident in Kinshasa, Democratic Republic of the Congo. In 2001 suspensions on Embassy operations were lifted, and Embassy personnel were allowed to travel to Brazzaville for periods of extended temporary duty from the U.S. Embassy in Kinshasa. In 2003, U.S.-Congo bilateral relations were reinvigorated, and a site for construction of a new Embassy was acquired in July 2004. Diplomatic activities, operations, and programs were carried out in a temporary bank location until January 2009, when a new, fully functioning Embassy was opened. Relations between the United States and the government of President Denis Sassou-Nguesso are strong, positive, and cooperative.

Principal U.S. Officials
Ambassador--Alan W. Eastham
Deputy Chief of Mission--Jonathan Pratt
Management Officer--Vanessa Brooks
Office Manager--Pamela Aulton
Consular Officer--Chris McHone
Public Diplomacy/Economic Officer--Shayna Cram

The U.S. Embassy in Congo is located on Boulevard Maya-Maya (also called Boulevard de l’Aeroport), Brazzaville, Republic of the Congo (tel: 242-612-2000; no fax capability). American citizens may email the Embassy at BrazzavilleACS@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.

Background Notes : Sao Tome and Principe (11/09)

Tue, 10 Nov 2009 12:22:58 EDT

Background Note: Sao Tome and Principe

November 2009

Bureau of African Affairs

PROFILE

OFFICIAL NAME:
Democratic Republic of Sao Tome and Principe

Geography
Location: Western Africa; islands straddling the equator in the Gulf of Guinea west of Gabon.
Area: 1,001 sq. km. (386 sq. mi.); about the size of metropolitan Indianapolis, or one-third the size of Rhode Island.
Cities: Capital--Sao Tome. Other cities--Trindade, Santana, Angolares, Neves, Guadalupe, and Santo Antonio.
Terrain: Two small, volcanic islands, plus associated smaller islands.
Climate: Tropical, with wet and dry seasons, influenced by the mountainous topography.

People
Nationality: Noun and adjective--Sao Tomean(s).
Population (July 2009 est.): 212,679.
Annual growth rate (2009 est.): 3.093%.
Ethnic groups: Mixed African, Portuguese-African.
Religions: Christian (Roman Catholic, Evangelical Protestant, Seventh-day Adventist) 90%.
Language: Portuguese (official).
Education: Literacy (census 2001)--84.9%. Years compulsory--to secondary level.
Health: Life expectancy (2009 est.)--68.32 yrs. Infant mortality rate (2009 est.)--37.12/1,000.
Work force (by household, 2000 UN Development Program est.): Agriculture--15.3%; industry, commerce, services--36.5%; government--11.5%.

Government
Type: Republic.
Independence: July 12, 1975 (from Portugal).
Constitution: November 5, 1975; revised September 1990, following a national referendum, revised again January 2003.
Branches: Executive--president and prime minister. Legislative--National Assembly. Judicial--Supreme Court.
Administrative subdivisions: Seven counties, six on Sao Tome and one on Principe.
Political parties: Movement for the Liberation of Sao Tome and Principe (MLSTP), Party of Democratic Convergence (PCD), Independent Democratic Action (ADI), Democratic Movement Force of Change (MDFM), Christian Democratic Front-Socialist Union Party (FDC-PSU), Santomean Workers Party (PTS); Popular Party of Progress (PPP), National Union for Democracy and Progress (UNDP), and Democratic Coalition of the Opposition (CODO).
Suffrage: Universal adult (18 years old).

Economy
GDP (2008 est.): $276.6 million.
Annual real GDP growth rate (2008 est.): 5.5%.
Per capita GDP (2008 est.): $1,300.
Consumer price inflation (2008 est.): 27%.
Natural resources: Agricultural products, fish, petroleum (not yet exploited).
Agriculture (14.6% of GDP, 2008): Products--cocoa, coconuts, copra, palm kernels, cinnamon, pepper, coffee, bananas, beans, poultry. Cultivated land--484 sq. kilometers.
Industry (14.6% of GDP, 2008): Types--light construction, shirts, soap, beer, fisheries, shrimp processing, palm oil.
Trade: Exports (2008 est.)--$9 million (f.o.b.): 95% cocoa, copra, palm kernels, coffee. Major markets--Portugal, Netherlands, Spain, Germany, China. Imports (2008 est.)--$91 million (f.o.b.): food, fuel, machinery and electrical equipment. Major suppliers--Portugal (43%), France (16%), U.K. (14%).
Total external debt (2007 est.): None.
Fiscal year: Calendar year.

GEOGRAPHY
The islands of Sao Tome and Principe are situated in the equatorial Atlantic about 300 and 250 kilometers (200 mi. and 150 mi.), respectively, off the northwest coast of Gabon. Both are part of an extinct volcanic mountain range, which also includes the island of Bioko in Equatorial Guinea to the north and Mount Cameroon on the African west coast. Sao Tome is 50 kilometers (31 mi.) long and 32 kilometers (20 mi.) wide and the more mountainous of the two islands. Its peaks reach 2,024 meters (6,640 ft.). Principe is about 30 kilometers (19 mi.) long and 6 kilometers (4 mi.) wide. Swift streams radiating down the mountains through lush forest and cropland to the sea cross both islands.

At sea level, the climate is tropical--hot and humid with average yearly temperatures of about 80 degrees Fahrenheit (27 degrees Celsius) and little daily variation. At the interior's higher altitudes, the average yearly temperature is 68 degrees Fahrenheit (20 degrees Celsius), and nights are generally cool. Annual rainfall varies from 200 inches (500 centimeters) on the southwestern slopes to 40 inches (100 centimeters) in the northern lowlands. The rainy season runs from October to May.

PEOPLE
Of Sao Tome and Principe's total population, about 137,500 live on Sao Tome and 5,000 on Principe. All are descended from various ethnic groups that have migrated to the islands since 1485. Six groups are identifiable:

Mestiço, or mixed-blood, descendants of African slaves brought to the islands during the early years of settlement from Benin, Gabon, and Congo and Europeans (these people also are known as filhos da terra or "sons of the land");
Angolares, reputedly descendants of Angolan slaves who survived a 1540 shipwreck and now earn their livelihood fishing;
Forros, descendants of freed slaves when slavery was abolished;
Servicais, contract laborers from Angola, Mozambique, and Cape Verde, living temporarily on the islands;
Tongas, children of servicais with forros born on the islands; and
Europeans, primarily Portuguese.

In the 1970s, there were two significant population movements--the exodus of most of the 4,000 Portuguese residents and the influx of several hundred Sao Tomean refugees from Angola. The islanders have been absorbed largely into a common Luso-African culture. Almost all belong to the Roman Catholic, Evangelical Protestant, or Seventh-day Adventist Churches, which in turn retain close ties with churches in Portugal.

HISTORY
Portuguese navigators first discovered the islands between 1469 and 1472. The first successful settlement of Sao Tome was established in 1493 by Alvaro Caminha, who received the land as a grant from the Portuguese crown. Principe was settled in 1500 under a similar arrangement. By the mid-1500s, with the help of slave labor, the Portuguese settlers had turned the islands into Africa's foremost exporter of sugar. Sao Tome and Principe were taken over and administered by the Portuguese crown in 1522 and 1573, respectively.

Sugar cultivation declined over the next 100 years, and by the mid-1600s, Sao Tome was little more than a port of call for bunkering ships. In the early 1800s, two new cash crops, coffee and cocoa, were introduced. The rich volcanic soils proved well suited to the new cash crop industry and soon extensive plantations (roças), owned by Portuguese companies or absentee landlords, occupied almost all of the good farmland. By 1908, Sao Tome had become the world's largest producer of cocoa, still the country's most important crop.

The roças system, which gave the plantation managers a high degree of authority, led to abuses against the African farm workers. Although Portugal officially abolished slavery in 1876, the practice of forced paid labor continued. In the early 1900s, an internationally publicized controversy arose over charges that Angolan contract workers were being subjected to forced labor and unsatisfactory working conditions. Sporadic labor unrest and dissatisfaction continued well into the 20th century, culminating in an outbreak of riots in 1953 in which several hundred African laborers were killed in a clash with their Portuguese rulers. This "Batepa Massacre" remains a major event in the colonial history of the islands, and the government officially observes its anniversary.

By the late 1950s, when other emerging nations across the African Continent were demanding independence, a small group of Sao Tomeans had formed the Movement for the Liberation of Sao Tome and Principe (MLSTP), which eventually established its base in nearby Gabon. Picking up momentum in the 1960s, events moved quickly after the overthrow of the Salazar and Caetano dictatorship in Portugal in April 1974. The new Portuguese regime was committed to the dissolution of its overseas colonies; in November 1974, their representatives met with the MLSTP in Algiers and worked out an agreement for the transfer of sovereignty. After a period of transitional government, Sao Tome and Principe achieved independence on July 12, 1975, choosing as its first President the MLSTP Secretary General, Manuel Pinto da Costa.

In 1990, Sao Tome became one of the first African countries to embrace democratic reform. Changes to the constitution, including the legalization of opposition political parties, led to nonviolent, free, and transparent elections in 1991. Miguel Trovoada, a former Prime Minister who had been in exile since 1986, returned as an independent candidate and was elected President. Trovoada was re-elected in Sao Tome's second multiparty presidential election in 1996. The Party of Democratic Convergence (PCD) toppled the MLSTP to take a majority of seats in the National Assembly, with the MLSTP becoming an important and vocal minority party. Municipal elections followed in late 1992, in which the MLSTP came back to win a majority of seats on five of seven regional councils. In early legislative elections in October 1994, the MLSTP won a plurality of seats in the Assembly. It regained an outright majority of seats in the November 1998 elections.

The Government of Sao Tome fully functions under a multiparty system. Presidential elections were held in July 2001. The candidate backed by the Independent Democratic Action Party, Fradique de Menezes, was elected in the first round and inaugurated on September 3. Parliamentary elections held in March 2002 led to a coalition government after no party gained a majority of seats. An attempted coup d'etat in July 2003 by a few members of the military and the Christian Democratic Front (mostly representative of former Sao Tomean volunteers from the apartheid-era Republic of South African Army) was reversed by international, including American, mediation without bloodshed. In September 2004, President de Menezes dismissed the Prime Minister and appointed a new cabinet, which was accepted by the majority party. In June 2005, following public discontent with oil exploration licenses granted in the Joint Development Zone (JDZ) with Nigeria, the MLSTP, the party with the largest number of seats in the National Assembly, and its coalition partners threatened to resign from government and force early parliamentary elections. After several days of negotiations, the President and the MLSTP agreed to form a new government and to avoid early elections. The new government included Maria Silveira, the well-respected head of the Central Bank, who served concurrently as Prime Minister and Finance Minister.

The March 2006 legislative elections were held without problems. President Menezes' party, the Movement for the Democratic Force of Change (MDFM), in coalition with Party of Democratic Convergence (PCD), won 23 seats and took an unexpected lead ahead of the MLSTP. The MLSTP came in second with 20 seats, the Independent Democratic Alliance (ADI) came in third with 11 seats, and the movement “Novo Rumo” had one seat. Amidst negotiations to form a new coalition government, President Menezes nominated a new prime minister and cabinet.

Sao Tome and Principe held its fourth democratic, multiparty presidential elections on July 30, 2006. Local and international observers described the elections as being free and fair. Incumbent Fradique de Menezes won the election with approximately 60% of the vote. Voter turnout was relatively high with 63% of the 91,000 registered voters casting ballots.

In November 2007, Prime Minister Tome Vera Cruz threatened to resign, and several ministers in his government were replaced following significant public criticism of souring economic conditions and the government's handling of recurring mutinies by dissident police officers. The changes took place peacefully and without incident. During another government shakeup in February 2008, President de Menezes appointed Patrice Trovoada as Prime Minister.

On May 20, 2008 the government collapsed after losing a parliamentary vote of confidence. The opposition Movement for the Liberation of Sao Tome and Principe-Social Democratic Party (MLSTP-PSD), with the support of Party of Democratic Convergence (PCD), asserted that Prime Minister Trovoada had failed to deliver on reforms that he promised when he entered office. Joaquim Rafael Branco became Prime Minister in June 2008.

GOVERNMENT
Following the promulgation of a new constitution in 1990, Sao Tome and Principe held multiparty elections for the first time since independence. Shortly after the constitution took effect, the National Assembly formally legalized opposition parties. Independent candidates also were permitted to participate in the January 1991 legislative elections. The 55-member National Assembly is the supreme organ of the state and the highest legislative body. Its members are elected for a 4-year term and meet semiannually.

The president of the republic is elected to a 5-year term through direct universal suffrage and a secret ballot, and may hold office up to two consecutive terms. Candidates are chosen at their party's national conference or individuals may run independently. A presidential candidate must obtain an outright majority of the popular vote in either a first or second round of voting in order to be elected president. The party that wins a majority in the legislature names the prime minister, who must be approved by the president. The prime minister, in turn, names the members of the cabinet.

The Supreme Court administers justice at the highest level. The judiciary is independent under the current constitution.

Administratively, the country is divided into seven municipal districts, six on Sao Tome and one comprising Principe. Governing councils in each district maintain a limited number of autonomous decision-making powers, and are reelected every 3 years.

Principal Government Officials
President--Fradique Bandeira Melo de MENEZES
Prime Minister--Joaquim Rafael BRANCO
Minister of Foreign Affairs and Cooperation--Carlos Alberto Pires TINY
Minister of Defense and Internal Affairs--Elsa Texeira De Barros PINTO
Ambassador to the United States--Ovidio Manuel BARBOSA PEQUENO
Representative at the United Nations--To be named

The Sao Tomean Embassy to the United States is located at 1211 Connecticut Avenue, NW, Suite 300, Washington, DC 20036 (tel. 202-775-2075); Email: embstpusa@verizon.net.

For visa information, please contact Mr. Domingos Augusto Ferreira, Cell: 917-751-2742; Fax: 212-239-2272; Email: domingosferreira74@hotmail.com; or the Embassy in Washington.

POLITICAL CONDITIONS
Sao Tome has made great strides toward developing its democratic institutions and further guaranteeing the civil and human rights of its citizens. Sao Tomeans have freely changed their government through peaceful and transparent elections. And while there have been disagreements and political conflicts within the branches of government and the National Assembly, the debates have been carried out and resolved in open, democratic, and legal fora, in accordance with the provisions of Sao Tomean law. A number of political parties actively participate in government and openly express their views. Freedom of the press is respected, and there are several independent newspapers in addition to the government bulletin. The government's respect for human rights is exemplary. The government does not engage in repressive measures against its citizens, and respect for individuals' rights to due process and protection from government abuses is widely honored. Freedom of expression is accepted, and the government has taken no repressive measures to silence critics.

ECONOMY
Since the 1800s, plantation agriculture dominated the economy of Sao Tome and Principe. At the time of independence, Portuguese-owned plantations occupied 90% of the cultivated area. After independence, control of these plantations passed to various state-owned agricultural enterprises, which have since been privatized. The dominant crop on Sao Tome is cocoa, representing about 95% of exports. Other export crops include copra, palm kernels, and coffee.

Domestic food-crop production is inadequate to meet local consumption, resulting in the need for food imports. Foreign donors are financing projects to expand food production.

Other than agriculture, the main economic activities are fishing and a small industrial sector engaged in processing local agricultural products and producing a few basic consumer goods. The scenic islands have potential for tourism, and the government is attempting to improve its rudimentary tourist industry infrastructure. The government sector accounts for about 11% of employment.

Following independence, the country had a centrally directed economy with most means of production owned and controlled by the state. The original constitution guaranteed a 'mixed economy,' with privately owned cooperatives combined with publicly owned property and means of production. In the 1980s and 1990s, the economy of Sao Tome encountered major difficulties. Economic growth stagnated, and cocoa exports dropped in both value and volume, creating large balance-of-payments deficits. Efforts to redistribute plantation land resulted in decreased cocoa production. At the same time, the international price of cocoa slumped.

In response to its economic downturn, the government undertook a series of far-reaching economic reforms. In 1987, the government implemented an International Monetary Fund (IMF) structural adjustment program, and invited greater private participation in management of the parastatals, as well as in the agricultural, commercial, banking, and tourism sectors. The focus of economic reform since the early 1990s has been widespread privatization, especially of the state-run agricultural and industrial sectors.

The Sao Tomean Government has traditionally been reliant on foreign assistance from various donors, including the UN Development Program, the World Bank, the European Union (EU), Portugal, Taiwan, and the African Development Bank. Sao Tome qualified for debt relief when it reached decision point under the IMF's Heavily Indebted Poor Countries Initiative (HIPC) in December 2000, but went off track on its poverty reduction program in early 2001. After 4 years and satisfactory performance on an interim staff-monitored program, the IMF approved a 3-year $4.3 million Poverty Reduction and Growth Facility (PRGF) program for Sao Tome in September 2005. The ambitious program aimed to reduce inflation to a single-digit number, address the country's macroeconomic imbalances, and substantially reduce poverty. Another 3-year PRGF arrangement was approved in March 2009.

In 2001, Sao Tome and Nigeria reached agreement on joint exploration for petroleum in waters claimed by the two countries. After a lengthy series of negotiations, in April 2003 the joint development zone (JDZ) was opened for bids by international oil firms. The JDZ was divided into 9 blocks; the winning bids for block one, Chevron, ExxonMobil, and the Norwegian firm Equity Energy, were announced in April 2004, with Sao Tome to take in 40% of the $123 million bid, and Nigeria the other 60%. Blocks 2 through 6 were allocated in June 2005. Nigeria and Sao Tome signed production sharing contracts with the winning bidders in November 2005. Chevron became the first firm to start exploratory drilling in January 2006.

Portugal remains one of Sao Tome's major trading partners, particularly as a source of imports. Food, manufactured articles, machinery, and transportation equipment are imported primarily from the EU.

FOREIGN RELATIONS
Until independence in 1975, Sao Tome and Principe had few ties abroad except those that passed through Portugal. Following independence, the new government sought to expand its diplomatic relationships. A common language, tradition, and colonial experience have led to close collaboration between Sao Tome and other ex-Portuguese colonies in Africa, particularly Angola. Sao Tomean relations with other African countries in the region, such as Gabon and the Republic of the Congo, also are good. In December 2000, Sao Tome signed the African Union treaty; the National Assembly later ratified it.

The Sao Tomean Government has generally maintained a foreign policy based on nonalignment and cooperation with any country willing to assist in its economic development. In recent years, it also has increasingly emphasized ties to the United States and Western Europe.

U.S.-SAO TOMEAN RELATIONS
The United States was among the first countries to accredit an ambassador to Sao Tome and Principe. The U.S. Ambassador based in Gabon is accredited to Sao Tome on a non-resident basis. The Ambassador and Embassy staff make regular visits to the islands. The first Sao Tomean Ambassador to the United States, resident in New York City, was accredited in 1985. In 1986, Sao Tomean President Pinto da Costa visited the United States and met with then-Vice President George H.W. Bush.

U.S. relations with Sao Tome are excellent. In 1992, the Voice of America (VOA) and the Government of Sao Tome signed a long-term agreement for the establishment of a relay transmitter station in Sao Tome; VOA currently broadcasts to much of Africa from this facility. In 2007, the Millennium Challenge Corporation approved a 2-year threshold program to improve the capacity of the country's tax administration and customs enforcement agencies. The U.S. Government also maintains a number of smaller assistance programs in Sao Tome, administered through non-governmental organizations or the Embassy in Libreville.

Principal U.S. Officials
Ambassador--Eunice Reddick (resident in Gabon)
Deputy Chief of Mission--Kathleen FitzGibbon
Management Officer--Judith Johnson
Public Affairs/Economic/Commercial Officer--Dolores Canavan
Political Officer--Christopher Gunning
Defense Attache--Jack Aalborg
Consular Officer--Grace Genuino

The U.S. Embassy accredited to Sao Tome and Principe is located on the Boulevard de la Mer, B.P. 4000, Libreville, Gabon (tel: 241-762-003; fax: 241-745-507).

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.

Background Notes : Saint Kitts and Nevis (11/09)

Tue, 10 Nov 2009 16:05:43 EDT

Background Note: Saint Kitts and Nevis

November 2009

Bureau of Western Hemisphere Affairs

PROFILE

OFFICIAL NAME:
Federation of Saint Kitts and Nevis

Geography
Area: St. Kitts 168 sq. km. (65 sq. mi.); Nevis 93 sq. km. (36 sq. mi.).
Cities: Capital--Basseterre (pop. about 15,000).
Terrain: Generally mountainous; highest elevations are 1,156 m. (3,792 ft.) at Mt. Liamuiga on St. Kitts and 985 m; (3,232 ft.) at Nevis peak on Nevis.
Climate: Tropical.

People
Nationality: Noun and adjective--Kittitian(s), Nevisian(s).
Population (2007): 39,129.
Annual growth rate (2007): 1%.
Ethnic groups: Predominantly of African origin; some of British, Portuguese, and Lebanese descent.
Religions: Principally Anglican, with Evangelical Protestant and Roman Catholic minorities.
Languages: English (official).
Education (2005): Adult literacy--97.8%.
Health (2007): Infant mortality rate--14.5/1,000. Life expectancy--men 68 years; women 72 years.
Unemployment (2006): 5.1%.

Government
Type: Parliamentary democracy; independent sovereign state within the Commonwealth.
Constitution: 1983.
Independence: September 19, 1983.
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 Appeals), final appeal to Privy Council in London.
Administrative subdivisions: 14 parishes.
Political parties: St. Kitts and Nevis Labour Party (ruling), People's Action Movement (PAM), Concerned Citizens Movement (a Nevis-based party), and Nevis Reformation Party.
Suffrage: Universal at 18.

Economy
GDP (2007): $477.4 million.
GDP growth rate (2006): 5.8%.
Per capita GDP (2006): $8,546.
Inflation (2006): 5.25%.
Natural resources: Negligible.
Agriculture: Rice, yams, bananas, fish, cotton, peanuts, vegetables.
Industry: Financial and business services, tourism, construction, clothing, footwear, beverages, and tobacco.
Trade (2006): Exports--$31 million (merchandise) and $139 million (commercial services). Major markets--United States (91.9%), EU (3.0%), Trinidad and Tobago (2%), Netherlands Antilles (0.8%), St. Vincent and the Grenadines (0.3%). Imports--$210 million (merchandise) and $87 million (commercial services). Major suppliers--United States (57.9%), Trinidad and Tobago (14.1%), European Union (9.3%), Japan (3.8%), and Barbados (2.8%).
Official exchange rate: EC$2.70 = U.S. $1.

HISTORY
At the time of European discovery, Carib Indians inhabited the islands of St. Kitts and Nevis. Christopher Columbus landed on the larger island in 1493 on his second voyage and named it after St. Christopher, his patron saint. Columbus also discovered Nevis on his second voyage, reportedly calling it Nevis because of its resemblance to a snowcapped mountain (in Spanish, "nuestra senora de las nieves" or our lady of the snows). European settlement did not officially begin until 1623-24, when first English, then French settlers arrived on St. Christopher's Island, whose name the English shortened to St. Kitts Island. As the first English colony in the Caribbean, St. Kitts served as a base for further colonization in the region.

The English and French held St. Kitts jointly from 1628 to 1713. During the 17th century, intermittent warfare between French and English settlers ravaged the island's economy. Meanwhile Nevis, settled by English settlers in 1628, grew prosperous under English rule. St. Kitts was ceded to Great Britain by the Treaty of Utrecht in 1713. The French seized both St. Kitts and Nevis in 1782. The Treaty of Paris in 1783 definitively awarded both islands to Britain. They were part of the colony of the Leeward Islands from 1871-1956, and of the West Indies Federation from 1958-62. In 1967, together with Anguilla, they became a self-governing state in association with Great Britain; Anguilla seceded late that year and remains a British dependency. The Federation of St. Kitts and Nevis attained full independence on September 19, 1983.

GOVERNMENT AND POLITICAL CONDITIONS
As head of state, Queen Elizabeth II is represented in St. Kitts and Nevis by a governor general, who acts on the advice of the prime minister and the cabinet. The prime minister is the leader of the majority party of the House of Representatives, and the cabinet conducts affairs of state. St. Kitts and Nevis has a bicameral legislature: An 11-member Senate appointed by the governor general (mainly on the advice of the prime minister and the leader of the opposition); and an 11-member popularly elected House of Representatives which has eight St. Kitts seats and three Nevis seats. The prime minister and the cabinet are responsible to the Parliament.

St. Kitts and Nevis has enjoyed a long history of free and fair elections, although the outcome of elections in 1993 was strongly protested by the opposition and the Eastern Caribbean Regional Security System (RSS) was briefly deployed to restore order. The elections in 1995 were contested by the two major parties, the ruling People's Action Movement (PAM) and the St. Kitts and Nevis Labour Party. Labour won seven of the 11 seats, with Dr. Denzil Douglas becoming prime minister. In the 2004 elections, Denzil Douglas and the Labour Party were returned to power, winning seven of the eight seats allotted to St. Kitts in the Parliament. The Nevis-based Concerned Citizens Movement (CCM) won two seats, the Nevis Reformation Party (NRP) won one seat, and the PAM party won one seat. The next elections are constitutionally due by March 2010.

The constitution gives Nevis considerable autonomy. Nevis has an island assembly, a premier, and a deputy governor general. Under certain specified conditions, it may secede from the federation. In accordance with its rights under the Constitution, in 1996 the Nevis Island Administration under the Concerned Citizens' Movement (CCM) of Premier Vance Amory initiated steps towards secession from the Federation, the most recent being a referendum in 1998 that failed to secure the required two-thirds majority for secession. In the July 10, 2006 Nevis elections for the Nevis Island Administration, the NRP won three of the five seats; the CCM won two. The NRP's Joseph Parry assumed the premiership of Nevis. While opposing secession, the government acknowledged the constitutional rights of Nevisians to determine their future independence. Constitutional safeguards include freedom of speech, press, worship, movement, and association. Like its neighbors in the English-speaking Caribbean, St. Kitts and Nevis has an excellent human rights record. Its judicial system is modeled on British practice and procedure and its jurisprudence on English common law.

Principal Government Officials
Chief of State--Queen Elizabeth II
Governor General--Sir Cuthbert M. Sebastian
Prime Minister and Minister of Finance, Sustainable Development, Information and Technology, Tourism, Culture and Sports--Denzil L. Douglas
Minister of Foreign Affairs and Education--Timothy Harris
Ambassador to the United States and Permanent Representative to the OAS--Izben Williams
Permanent Representative to the UN--Delano Bart
Principal Nevis Island Government Official, Premier--Joseph Parry

The embassy of St. Kitts and Nevis is located at 3216 New Mexico Ave., NW, Washington, DC 20016 (tel. 202-686-2636).

ECONOMY
St. Kitts and Nevis was the last sugar monoculture in the Eastern Caribbean until the government decided to close the sugar industry in 2005, after decades of losses at the state-run sugar company. To compensate for the loss of the sugar industry, the Government of St. Kitts and Nevis has begun exploring alternative energy uses for sugar cane. The United States and Brazil have agreed to develop biofuels programs in the region.

The economy of St. Kitts and Nevis experienced strong growth for most of the 1990s, but hurricanes in 1998 and 1999 and the September 11, 2001 terrorist attacks hurt the tourism-dependent economy. Economic growth picked up in 2004, with a real GDP growth rate of 6.4%, followed by 4.1% growth in 2005. The GDP growth rate rose to 5.8% in 2006, mostly as a result of diversification into tourism and construction related to the Cricket World Cup. Tourism has shown the greatest growth and is now a major foreign exchange earner for St. Kitts and Nevis, as evidenced by an 83% increase in foreign direct investment in a range of tourism-related projects. Recent significant investment included a 648-room Marriott hotel and convention center that opened in December 2002, as well as 2007 plans for "Christophe Harbor," a U.S. investor-funded $500 million resort project. The government instituted a program of investment incentives for businesses considering the possibility of locating in St. Kitts or Nevis, encouraging domestic and foreign private investment. Government policies provide liberal tax holidays, duty-free import of equipment and materials, and subsidies for training provided to local personnel.

However, the debt of public enterprises has increased, and total public and publicly guaranteed debt reached $290,740,000 in 2006. Consumer prices have risen marginally over the past few years. The rate of inflation, as measured by the change in the CPI, rose on average by 5.3% in 2006, compared with 3.6% in 2005 and 2.3% in 2004.

St. Kitts and Nevis is a member of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the Eastern Caribbean dollar (EC$) for all members of the ECCU. The ECCB also manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7 to U.S. $1.

FOREIGN RELATIONS
St. Kitts and Nevis maintains diplomatic relations with the United States, Canada, the United Kingdom, France, Russia, Taiwan, Cuba, and South Korea, as well as with many Latin American countries and neighboring Eastern Caribbean states. It is a member of the Commonwealth, the United Nations, the World Bank and the International Monetary Fund, the Organization of American States, the Organization of Eastern Caribbean States, the Eastern Caribbean Regional Security System (RSS), and the Caribbean Community and Common Market (CARICOM). The Eastern Caribbean Central Bank is headquartered in St. Kitts. St. Kitts and Nevis has chosen to recognize Taiwan instead of the People's Republic of China.

U.S.-ST. KITTS AND NEVIS RELATIONS
Since St. Kitts and Nevis attained full independence in 1983, relations with the United States have been friendly. The United States seeks to help St. Kitts and Nevis develop economically and to help strengthen its moderate, democratic, parliamentary form of government. St. Kitts and Nevis is a beneficiary of the U.S. Caribbean Basin Initiative. U.S. assistance is primarily channeled through multilateral agencies such as the World Bank and the Caribbean Development Bank (CDB), as well as the USAID office in Bridgetown, Barbados. In addition, St. Kitts and Nevis benefits from U.S. military exercises and humanitarian civic action construction projects.

St. Kitts and Nevis is strategically placed in the Leeward Islands, near maritime transport lanes of major importance to the United States. St. Kitts and Nevis' location close to Puerto Rico and the U.S. Virgin Islands makes the two-island federation attractive to narcotics traffickers. To counter this threat, the Government of St. Kitts and Nevis cooperates with the United States in the fight against illegal narcotics. In 1995, the government signed a maritime law enforcement treaty with the United States, later amended with an overflight/order-to-land amendment in 1996. St. Kitts and Nevis also signed an updated extradition treaty with the United States in 1996, and a mutual legal assistance treaty in 1997.

St. Kitts and Nevis is a popular American tourist destination. In the aftermath of September 11, 2001, tourism declined, but the islands have seen growing numbers of visitors in recent years. Fewer than 1,000 U.S. citizens reside on the island, although students and staff of Ross University Veterinary School and the Medical University of the Americas (Nevis) constitute a significant population of U.S. citizens.

The United States maintains no official presence in St. Kitts and Nevis. The Ambassador and Embassy officers are resident in Barbados and frequently travel to St. Kitts and Nevis. A U.S. consular agent residing in nearby Antigua, however, assists U.S. citizens in St. Kitts and Nevis.

Principal U.S. Embassy Officials
Ambassador--vacant
Deputy Chief of Mission--D. Brent Hardt
Political/Economic Chief--Ian Campbell
Consul General--Nicole Theriot
Regional Labor Attaché--Jake Aller
Commercial Affairs--Ian Campbell
Public Affairs Officer--John Roberts
Peace Corps Director--Margo Jean-Child (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).

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

Background Notes : Antigua and Barbuda (11/09)

Thu, 12 Nov 2009 09:42:38 EDT

Background Note: Antigua and Barbuda

November 2009

Bureau of Western Hemisphere Affairs

Men participate in parade marking 25th anniversary of Antigua's independence, St. John, Antigua. November 1, 2006. [© AP Images]

PROFILE

OFFICIAL NAME:
Antigua and Barbuda

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 (2006): 84,097.
Annual population growth rate (2005): 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 (2006): Infant mortality rate--10/1,000. Life expectancy--men 70 years; women 74 years.
Work force (2005): 30,000 (commerce and services, agriculture, other industry).
Unemployment (2002): 13%.

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 Appeals), 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 (2007): $1.189 billion.
GDP growth rate (2007): 3.8%.
Per capita GDP (2007): $10,671.
Inflation (2005): 0.9%.
Natural resources: Negligible.
Agriculture: Fish, cotton, livestock, vegetables, and pineapples.
Services: Tourism, 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 the 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.

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.

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--H. E. 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--Dr. 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 grew by 3.8% in 2007, experiencing its third consecutive year of strong growth. Construction, banking and insurance, communications, and wholesale and retail trade sectors were the main contributors to economic growth, which was driven by a construction boom in hotels and housing, as well as projects related to the 2007 Cricket World Cup. The tourism and hospitality sector has largely recovered after the decrease in tourism following the September 11, 2001 terrorist attacks. It posted a strong performance in 2004, and in 2005 the sector was estimated at 50% of GDP.

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 that 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 countries 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 counter-narcotics 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 counter-narcotic and counter-crime 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--Ian Campbell
Consul General--Nicole Theriot
Antigua Country Office--Rick Switzer
Commercial Affairs--Ian Campbell
Public Affairs Officer--John C. Roberts
Peace Corps Director--Margo Jean-Child (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).

Antigua - Consular Agent--vacant

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

Background Notes : Djibouti (11/09)

Tue, 10 Nov 2009 15:21:15 EDT

Background Note: Djibouti

November 2009

Bureau of African Affairs

PROFILE

OFFICIAL NAME:
Republic of Djibouti

Geography
Area: 23,180 sq. km; slightly smaller than Massachusetts.
Cities: Capital--Djibouti. Other cities--Dikhil, Arta, Ali-Sabieh, Obock, Tadjourah.
Terrain: Coastal desert.
Climate: Torrid and dry.

People
Nationality: Noun and adjective--Djiboutian(s).
Population (2009 est.): 516,055.
Annual growth rate (2009 est.): 1.903%.
Ethnic groups: Somali, Afar, Ethiopian, Arab, French, and Italian.
Religions: Muslim 94%, Christian 6%.
Languages: French and Arabic (official); Somali and Afar widely used.
Education: Literacy--67.9%.
Health: Infant mortality rate--97.51/1,000. Life expectancy--43.37 years.
Work force: Low employment rate. The largest employers are the Government of Djibouti, including telecommunications and electricity; Port of Djibouti; and airport. The U.S. Government, including the U.S. military base at Camp Lemonier, is also a large employer. Able-bodied unemployed population (est. 2007)--59%.

Government
Type: Republic.
Constitution: Ratified September 1992 by referendum.
Independence: June 27, 1977.
Branches: Executive--president. Legislative--65-member parliament, cabinet, prime minister. Judicial--based on French civil law system, traditional practices, and Islamic law.
Administrative subdivisions: 6 regions (districts)--Ali-Sabieh, Arta, Dikhil, Djibouti City, Obock, and Tadjourah.
Political parties: People's Rally for Progress (RPP); National Democratic Party (PND); Front For The Restoration of Unity and Democracy (FRUD); Djibouti Development Party (PDD); People’s Social Democratic Party (PPSD); Republican Alliance for Democracy (ARD); Union for Democracy and Justice (UDJ); Union of Reform Partisans (UPR).
Suffrage: Universal at 18.
National holiday: Independence Day, June 27 (1977).

Economy
GDP (2008 est.): $982 million.
Adjusted per capita income: $3,700 (est. 2008; based on purchasing power parity).
Natural resources: Minerals (salt, perlite, gold, gypsum, limestone) and energy resources (geothermal, wind, and solar).
Agriculture (less than 3% of GDP): Products--livestock, fishing, and limited commercial crops, including fruits and vegetables.
Industry: Types--banking and insurance (12.5% of GDP), public administration (22% of GDP), construction and public works, manufacturing, commerce, and agriculture.
Trade (2006 est.): Imports--$1.555 billion: consists of basic commodities, including food and beverages, pharmaceutical drugs, transport equipment, chemicals, and petroleum products. Exports--$340 million: re-exports, hides and skins, and coffee (in-transit). Major markets (2004)--France, Ethiopia, Somalia, India, China, and Saudi Arabia and other Arabian peninsula countries.

PEOPLE
About two-thirds of the Republic of Djibouti's inhabitants live in the capital city. The indigenous population is divided between the majority Somalis (predominantly of the Issa tribe, with minority Issaq and Gadabursi representation) and the Afars (Danakils). All are Cushitic-speaking peoples, and nearly all are Muslim. Among the 15,000 foreigners residing in Djibouti, the French are the most numerous. Among the French are approximately 3,000 troops.

HISTORY
The Republic of Djibouti gained its independence on June 27, 1977. It is the successor to French Somaliland (later called the French Territory of the Afars and Issas), which was created in the first half of the 19th century as a result of French interest in the Horn of Africa. However, the history of Djibouti, recorded in poetry and songs of its nomadic peoples, goes back thousands of years to a time when Djiboutians traded hides and skins for the perfumes and spices of ancient Egypt, India, and China. Through close contacts with the Arabian Peninsula for more than 1,000 years, the Somali and Afar tribes in this region became the first on the African continent to adopt Islam.

It was Rochet d'Hericourt's exploration into Shoa (1839-42) that marked the beginning of French interest in the African shores of the Red Sea. Further exploration by Henri Lambert, French Consular Agent at Aden, and Captain Fleuriot de Langle led to a treaty of friendship and assistance between France and the sultans of Raheita, Tadjourah, and Gobaad, from whom the French purchased the anchorage of Obock (1862).

Growing French interest in the area took place against a backdrop of British activity in Egypt and the opening of the Suez Canal in 1869. In 1884-85, France expanded its protectorate to include the shores of the Gulf of Tadjourah and Somaliland. Boundaries of the protectorate, marked out in 1897 by France and Emperor Menelik II of Ethiopia, were affirmed further by agreements with Ethiopian Emperor Haile Selassie I in 1945 and 1954.

The administrative capital was moved from Obock to Djibouti in 1892. In 1896, Djibouti was named French Somaliland. Djibouti, which has a good natural harbor and ready access to the Ethiopian highlands, attracted trade caravans crossing East Africa as well as Somali settlers from the south. The Franco-Ethiopian railway, linking Djibouti to the heart of Ethiopia, was begun in 1897 and reached Addis Ababa in June 1917, further facilitating the increase of trade.

During the Italian invasion and occupation of Ethiopia in the 1930s and during World War II, constant border skirmishes occurred between French and Italian forces. The area was ruled by the Vichy (French) government from the fall of France until December 1942, and fell under British blockade during that period. Free French and the Allied forces recaptured Djibouti at the end of 1942. A local battalion from Djibouti participated in the liberation of France in 1944.

On July 22, 1957, the colony was reorganized to give the people considerable self-government. On the same day, a decree applying the Overseas Reform Act (Loi Cadre) of June 23, 1956, established a territorial assembly that elected eight of its members to an executive council. Members of the executive council were responsible for one or more of the territorial services and carried the title of minister. The council advised the French-appointed governor general.

In a September 1958 constitutional referendum, French Somaliland opted to join the French community as an overseas territory. This act entitled the region to representation by one deputy and one senator in the French Parliament, and one counselor in the French Union Assembly.

The first elections to the territorial assembly were held on November 23, 1958, under a system of proportional representation. In the next assembly elections (1963), a new electoral law was enacted. Representation was abolished in exchange for a system of straight plurality vote based on lists submitted by political parties in seven designated districts. Ali Aref Bourhan, allegedly of Turkish origin, was selected to be the president of the executive council. French President Charles de Gaulle's August 1966 visit to Djibouti was marked by 2 days of public demonstrations by Somalis demanding independence. On September 21, 1966, Louis Saget, appointed governor general of the territory after the demonstrations, announced the French Government's decision to hold a referendum to determine whether the people would remain within the French Republic or become independent. In March 1967, 60% chose to continue the territory's association with France.

In July of that year, a directive from Paris formally changed the name of the region to the French Territory of Afars and Issas. The directive also reorganized the governmental structure of the territory, making the senior French representative (formerly the governor general) a high commissioner. In addition, the executive council was redesignated as the council of government, with nine members.

In 1975, the French Government began to accommodate increasingly insistent demands for independence. In June 1976, the territory's citizenship law, which favored the Afar minority, was revised to reflect more closely the weight of the Issa Somali. The electorate voted for independence in a May 1977 referendum. The Republic of Djibouti was established on June 27, 1977, and Hassan Gouled Aptidon became the country's first president. In 1981, he was again elected president of Djibouti. He was re-elected, unopposed, to a second 6-year term in April 1987 and to a third 6-year term in May 1993 multiparty elections.

In early 1992, the constitution permitted the legalization of four political parties for a period of 10 years, after which a complete multiparty system would be installed. By the time of the December 1992 national assembly elections, only three had qualified. They were the Rassemblement Populaire Pour le Progres (People's Rally for Progress--RPP), which was the only legal party from 1981 until 1992; the Parti du Renouveau Democratique (The Party for Democratic Renewal--PRD); and the Parti National Democratique (National Democratic Party--PND). Only the RPP and the PRD contested the national assembly elections, and the PND withdrew, claiming that there were too many unanswered questions on the conduct of the elections and too many opportunities for government fraud. The RPP won all 65 seats in the national assembly, with a turnout of less than 50% of the electorate.

In early November 1991, civil war erupted in Djibouti between the government and a predominantly Afar rebel group, the Front for the Restoration of Unity and Democracy (FRUD). The FRUD signed a peace accord with the government in December 1994, ending the conflict. Two FRUD members were made cabinet members, and in the presidential elections of 1999 the FRUD campaigned in support of the RPP.

In 1999, Ismail Omar Guelleh--President Hassan Gouled Aptidon's chief of staff, head of security, and key adviser for over 20 years--was elected to the presidency as the RPP candidate. He received 74% of the vote, with the other 26% going to opposition candidate Moussa Ahmed Idriss, of the Unified Djiboutian Opposition (ODU). For the first time since independence, no group boycotted the election. Moussa Ahmed Idriss and the ODU later challenged the results based on election "irregularities" and the assertion that "foreigners" had voted in various districts of the capital; however, international and locally based observers considered the election to be generally fair, and cited only minor technical difficulties. Ismail Omar Guelleh took the oath of office as the second President of the Republic of Djibouti on May 8, 1999, with the support of an alliance between the RPP and the government-recognized section of the Afar-led FRUD.

In February 2000, another branch of FRUD signed a peace accord with the government. On May 12, 2001, President Ismail Omar Guelleh presided over the signing of what was termed the final peace accord officially ending the decade-long civil war between the government and the armed faction of the FRUD. The peace accord successfully completed the peace process begun on February 7, 2000 in Paris. Ahmed Dini Ahmed represented the FRUD.

GOVERNMENT AND POLITICAL CONDITIONS
Djibouti is a republic whose electorate approved the current constitution in September 1992. Many laws and decrees from before independence remain in effect.

Djibouti’s next presidential election is scheduled for 2011. In the presidential election held April 8, 2005, Ismail Omar Guelleh was re-elected to a second 6-year term at the head of a five-party coalition that included the FRUD and other parties. A loose coalition of opposition parties again boycotted the election. Currently, political power is shared by a Somali Issa president and an Afar prime minister, with an Afar career diplomat as Foreign Minister and other cabinet posts roughly divided. However, some Djiboutians feel that Somali Issas are likely overrepresented in the government, civil service, and ruling party. That, together with a shortage of non-government employment, has bred resentment and continued political competition between the Somali Issas and the Afars. In March 2006, Djibouti held its first regional elections and began implementing a decentralization plan. Parliamentary elections were held in February 2008. The broad pro-government coalition, including FRUD candidates, again ran unopposed when the government refused to meet opposition preconditions for participation.

Djibouti has its own armed forces, including a small army, which grew significantly with the start of the civil war in 1991. With the 2001 final peace accord between the government and the Afar-dominated FRUD, the armed forces have been downsized. The country's security is supplemented by a formal security accord with the Government of France, which guarantees Djibouti's territorial integrity against foreign incursions. France maintains one of its largest military bases outside France in Djibouti. There are some 3,000 French troops stationed in Djibouti, including units of the famed French Foreign Legion.

The right to own property is respected in Djibouti. The government has reorganized the labor unions. While there have been open elections of union leaders in the past, some labor leaders allege interference in their internal elections. Others voice opposition to newly-implemented labor laws that apply to new jobs created in free zones and that are less favorable to labor.

In 2002, following a broad national debate, Djibouti enacted a new "Family Law" enhancing the protection of women and children, unifying legal treatment of all women, and replacing Sharia. The government established a minister for women's affairs and is engaged in an ongoing effort to increase public recognition of women's rights and to ensure enforcement. The government is leading efforts to stop illegal and abusive traditional practices, including female genital mutilation. As the result of an ongoing effort, the percentage of girls attending primary school increased significantly and is now more than 50%. However, women's rights and family planning continue to face difficult challenges, many stemming from acute poverty in both rural and urban areas. With female ministers and members of parliament, the presence of women in government has increased. Despite the gains, education of girls still lags behind boys, and employment opportunities are better for male applicants.

Principal Government Officials
President--Ismail Omar Guelleh
Prime Minister--Dileita Mohamed Dileita
Foreign Affairs--Mahamoud Ali Youssouf
Ambassador to the United Nations and the United States--Roble Olhaye Oudine

Djibouti's mission to the UN is located at 866 UN Plaza, Suite 4011, New York, NY 10017 (tel. 212-753-3163). Djibouti's embassy in Washington is located at Suite 515, 1156 15th Street, NW, Washington, DC 20005 (tel. 202-331-0270; fax 202-331-0302).

ECONOMY
Djibouti's economy depends largely on its proximity to the large Ethiopian market and a large foreign expatriate community. Its main economic activities are the Port of Djibouti, the banking sector, the airport, and the operation of the Addis Ababa-Djibouti railroad. During the "lost decade" following the brunt of its civil war (1991-94), there was a significant diversion of government budgetary resources from developmental and social services to military needs. However, from 2001 on, Djibouti has become a magnet for private sector capital investment, attracting foreign direct investment inflows that now top $200 million annually. It has also significantly improved its finances, paying current salaries, maintaining reserves, and generating a growth rate in 2008 of approximately 5.8%. Djibouti has become a significant regional banking hub, with approximately $600 million in dollar deposits. Its currency, the Djiboutian franc, was linked to the dollar (and to gold) in 1949 and appreciated twice over the interim when the dollar was devalued and then freed to float. Agriculture and industry are little developed, in part due to the harsh climate, high production costs, unskilled labor, and limited natural resources. Mineral deposits exist in the country, but with the exception of an extraordinary salt deposit at Lac Assal, the lowest point in Africa, they have not been exploited. The arid soil is unproductive--89% is desert wasteland, 10% is pasture, and 1% is forested. Deforestation for charcoal is a significant problem, as it now replaces expensive imported cooking gas in many urban homes. Services and commerce provide most of the gross domestic product.

Djibouti's most important economic asset is its strategic location on the busy shipping route between the Mediterranean Sea and the Indian Ocean. Roughly 60% of all commercial ships in the world use its waters from the Red Sea through the Bab-el-Mandeb strait and into the Gulf of Aden and the Indian Ocean. Its port is an increasingly important transshipment point for containers as well as a destination port for Ethiopian trade. In 2009, Djibouti and Dubai Ports World inaugurated the state-of-the-art, $300 million Doraleh Container Terminal. The older portion of the port will continue serving as a general shipping, bulk cargo, and break-bulk facility and also as the host of a small French naval facility.

Business soared at the Port of Djibouti when hostilities between Eritrea and Ethiopia denied Ethiopia access to the Eritrean Port of Assab. Djibouti became the only significant port for landlocked Ethiopia, handling all its imports and exports, including huge shipments of U.S. food aid in 2000 during the drought and famine. In 2000, Dubai Ports World took over management of Djibouti's port and later its customs and airport operations. The result has been a significant increase in investment, efficiency, activity, and port revenues. The Addis Ababa-Djibouti railroad is the only line serving central and southeastern Ethiopia. The single-track railway needs upgrades, but remains an important source of employment. A weekly train from Ethiopia brings in most of Djibouti's fresh fruits and vegetables. The bulk of Ethiopia-bound imports from Djibouti’s port are transported via truck. Principal exports from the region transiting Djibouti are coffee, salt, live animals, hides, dried beans, cereals, other agricultural products, and wax. Djibouti itself has few exports, and the majority of its imports come from France. Most imports are consumed in Djibouti, and the remainder go to Ethiopia and northwestern Somalia. Djibouti's unfavorable balance of trade is offset partially by invisible earnings such as transit taxes and harbor dues. In 2007, U.S. exports to Djibouti totaled $59 million, while U.S. imports from Djibouti were about $4 million.

The city of Djibouti has the only paved airport in the republic. Djibouti has one of the most liberal economic regimes in Africa, with almost unrestricted banking and commerce sectors.

FOREIGN RELATIONS
Military and economic agreements with France provide continued security and economic assistance. Djibouti serves as the headquarters for the European Union’s “Atalanta” naval task force and for a Japanese contingent, combating piracy off the coast of Somalia. Djibouti is a member of the League of Arab States (LAS) and the Organization of the Islamic Conference (OIC), as well as the African Union (AU), the Intergovernmental Authority on Development (IGAD), the Common Market for Eastern and Southern Africa (COMESA), and the International Organization of Francophones (“Organisation international de la Francophonie,” or OIF). Djibouti is also a member of the East African Standby Brigade Coordination Mechanism (EASBRICOM), which is currently commanded by a Djiboutian general.

Djibouti is greatly affected by events in Somalia and Ethiopia, so relations are important and, at times, delicate. The 1991 falls of the Siad Barre and Mengistu governments in Somalia and Ethiopia, respectively, caused Djibouti to face national security threats due to instability in the neighboring states and a massive influx of refugees estimated at 100,000 from Somalia and Ethiopia. In 2000, after 3 years of insufficient rain, 50,000 drought victims entered Djibouti. The number of refugees in Djibouti has doubled since 2006, with approximately 12,000 now registered with the UN High Commissioner for Refugees (UNHCR), predominantly from Somalia and Ethiopia.

In 1996, a revitalized organization of seven East African states, IGAD, established its secretariat in Djibouti. IGAD's mandate is for regional cooperation and economic integration, and it has also sought to play a positive role promoting regional stability, including its efforts in support of Somalia's Transitional Federal Government (TFG).

Djibouti seeks to play a stabilizing role in the frequently tense regional politics of the Horn of Africa. Djibouti hosted UN-sponsored Somali reconciliation talks in 2008-2009 (the “Djibouti Process”), and provided military training for TFG troops in late 2009. Djibouti became Ethiopia's sole link to the sea when fighting broke out between Ethiopia and Eritrea in 1998. Djibouti’s relations with Eritrea have become strained after a military confrontation in June 2008 along their shared border. The situation remains at an impasse, despite international condemnation of Eritrea’s continued occupation of Djiboutian territory at Ras Doumeira.

Djibouti continues to cultivate cordial relations with Ethiopia, reflecting the fundamental economic ties between the two countries and a long tradition of interchanges. However, rising tensions in Somalia and Ethiopian military involvement in Somalia in 2007 fueled widespread criticism of Ethiopia among Djibouti's majority Somali-speaking population. President Guelleh attended the 2007 Africa Union summit in Ethiopia and supports the African Union peacekeeping operation for Somalia (AMISOM).

U.S.-DJIBOUTIAN RELATIONS
In April 1977, the United States established a Consulate General in Djibouti and upon independence in June 1977 raised the status of its mission to an embassy. The first U.S. Ambassador to the Republic of Djibouti arrived in October 1980. Over the past decade, the United States has been a principal provider of humanitarian assistance for famine relief, and has sponsored health care, education, good governance, and security assistance programs.

Djibouti is a U.S. partner on security, regional stability, and humanitarian efforts in the Horn of Africa. The Djiboutian Government has been very supportive of U.S. and Western interests, particularly since the Gulf crisis of 1990-91 and after the terrorist attacks of September 11, 2001. President Guelleh continues to take a very proactive position against terrorism. In 2002, Djibouti agreed to host a U.S. military presence at Camp Lemonier, a former French Foreign Legion base outside the capital that now houses approximately 2,200 American personnel. U.S. service members have been instrumental in providing humanitarian, development, and security assistance to the people and governments of the Horn of Africa and Yemen. Djibouti has also allowed the U.S. military, as well as other nations, access to its port and airport facilities.

The U.S. Agency for International Development’s (USAID) Food for Peace program maintains a warehouse for pre-positioned emergency food relief in Djibouti--the only one of its kind outside the continental United States--allowing expedient delivery of humanitarian assistance to famine-stricken countries from Africa to Asia. International Broadcasting Bureau (IBB) facilities in Djibouti transmit Arabic-language Radio Sawa programming and Voice of America (VOA) Somali Service broadcasts to neighboring Somalia and the Arabian Peninsula.

Principal U.S. Officials
Ambassador--James Swan
Deputy Chief of Mission--Eric Wong
Consular Officer--Heather Wright
Public Affairs Officer--Niles Cole
Political and Economic Officer--Rebecca Hunter
Defense Attaché--Edward J. Dupont
Management Officer--Robert Osborne
Regional Security Officer--Michael Lombardo

The U.S. Embassy in Djibouti is located at Villa Plateau du Serpent, Blvd. Marechal Joffre (Boite Postal 185), Djibouti (tel. 253 35-39-95; fax 253 35-39-40).

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.