Guinea-Bissau - Economy

Guinea-Bissau is one of poorest countries in the world with 82% of the population relying on fishing and subsistence agriculture, and 88% of the population below the poverty line in 2002. The industrial sector is small, and mining is undeveloped. Offshore oil reserves that have not been expoited may be a source of income in the long term. Although firmly committed to market-style economic policies after an initial decade of socialist central planning, the government is burdened by a heavy external debt. Under the World Bank/IMF Heavily Indebted Poor Countries (HIPC) initiative, the net present value of Guinea-Bissau's total debt was to be reduced by 80% by 2003. By 2013, the level of debt was to be 43% lower than it would have been without help under the HIPC.

Cashews are the biggest cash crop, bringing in 95% of export revenues. The country is now the world's sixth largest producer of cashews. Livestock produces adequate supplies of meat, and hides are among Bissau's exports. Fishing prospects are excellent, but illegal fishing prevents a fuller realization of potential in this sector. Production and trade in forest products have been halted while implementation of reforestation policies occurs. In 1998, fighting between the government and a military junta brought chaos to the economy and halted most production: that year, GDP fell by 28%. Although the civil war had ended by 1999, in 2001 a fall in cashew prices and a decline in foreign assistance exacerbated the ailing state of the economy.

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