Mauritania - Overview of economy
Mauritania is among the world's poorest developing countries with a gross domestic product (GDP) per capita of just $478 in 1998, according to the United Nations Development Program . Since attaining independence from French colonial rule in 1960, primitive and low-productivity subsistence farming and herding continue to provide livelihood for the majority of the people. However, most nomads and many farmers have fled to the cities since the 1970s due to the spreading desertification of the land, caused by water depletion and locust attacks. Mauritania has deposits of iron ore, which contribute nearly half of its exports, and also copper ore, gypsum, and phosphates. The decline in demand for those products, however, has led to a decline in mining output and income in the 1990s. The coastal Atlantic has a rich fishing area but it is exploited by foreign interests.
Over the 1990s, drought, mismanagement, and waste of resources have contributed to the amassing of a large foreign debt (US$2.5 billion in 1997, or 226 percent of 1996 GDP) and the country remains dependent on foreign aid (US$227.9 million in 1995) and assistance. Debt service is a heavy burden; Mauritania has been qualified by the international community for debt relief as a heavily indebted poor country and seeks cancellation of US$620 million of its debt. Foreign investment is scarce; France and Arab countries (mainly Algeria) are its largest sources. Since 1998, the government has pursued a reform initiative to cut budgetary costs, reduce the waste of resources, and reform the tax system. In 1999, the International Monetary Fund (IMF) approved a US$57 million enhanced structural adjustment loan to support its program.