Guinea - Economy
Guinea has extensive mineral deposits, primarily bauxite, and hydroelectric resources, along with soils and climate favorable for producing a diverse array of food and export crops. The country has wide expanses of both natural and cultivated forests, and it has begun to exploit its potential as a producer of timber. Guinea is rich in fishery resoures, and has an as-yet untapped potential to increase industrial fishing. Still, Guinea is one of the poorest countries in the world.
For two decades after French withdrawal in 1958 the country was governed according to socialist-style economic management. Agriculture was collectivized and private commerce and industry repressed. In 1984, a major reform movement gained political power and reforms were instituted aimed at developing a modern market economy. The collective farms were abolished, state-owned enterprises were liquidated, compulsory marketing through state agencies was abolished, food prices were decontrolled, and the government began actively to seek foreign investment for sectors other than mining and energy. Although the reforms were largely successful, the economy has been restrained by an underdeveloped infrastructure, including poor transportation and communications systems. High levels of debt, unemployment, and underemployment also hamper economic progress.
As of 2000, 80% of the population engaged in subsistence agriculture. The mining sector accounted for about 75% of exports. Real growth in the GDP was 3.3% in 2001 and was expected to reach 6.5% in 2004. Despite a rise in the world price for bauxite, Guinea's primary export, earnings in the mining sector have been weak. In 2000, Guinea qualified for debt relief under the Heavily Indebted Poor Countries Initiative established by the World Bank and the IMF, and it was to use the savings for improvements in education, health, rural roads and rural water access. Fighting in Liberia and Sierra Leone has spilled over into Guinea and disrupted its economy.