## _wp1012 - Box 1: Colonizers of Microstates

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---

### Colonizers of microstates — empirical pattern
- Chart 1: Colonizer of Micro-States (Source: CIA Factook (2008))
  - UK 58%
  - Netherlands 8%
  - Portugal 8%
  - France 7%
  - USA 6%
  - Other 13%

### Political-economy of independence for microstates
- Most microstates became independent from the U.K., followed by Portugal, the Netherlands, France, and the U.S.
- U.S. cases were primarily U.S.-administered U.N. trusteeships (e.g., Palau, the Federated States of Micronesia).
- Possible determinants of differing independence outcomes:
  - French DOM-TOMs (“départements d'outre-mer, territoires d'outre-mer”) retain representation in the French parliament and subsidies that reduce appeal of independence.
  - The Commonwealth offers less financial benefit but a forum and “special relationship” that reduces perceived political costs of independence from the U.K.
  - Settler composition: DOM-TOMs often have a large share of “French stock” with strong links to mainland France; former British colonies often had settlers or resettled populations from Africa, Asia, or other colonies with weaker allegiance to the U.K.
- Historical context lowering costs and raising benefits of independence:
  - Rising fiscal pressures in colonizing powers reduced transfers to overseas territories.
  - Many microstates achieved independence peacefully, avoiding armed conflict costs.
  - Global factors: increased importance of punishing sovereignty violations (e.g., Kuwait), falling trade barriers, lower transport costs, and preferential agreements (Cotonou, Lomé, Economic Partnership Agreements) reduced economic costs of microstatehood.

### Exchange rate choices at independence — overview
- Typical post-independence exchange regime choices for microstates: dollarization (foreign legal tender), currency board arrangements (CBA), or fixed exchange rates (pegs).
- Motivations for creating a territorial currency:
  - National identity, trust and psychological identification with nation-state (Helleiner, 2004).
  - Seignorage revenue (example: Cape Verde estimated close to 1 percent of GDP per annum).
  - Possibility of independent monetary policy (interest rate adjustments, money supply increases), though practical benefits are limited for microstates.

### Problems of floating exchange rates in microstates
- Institutional prerequisites for floating (central bank start-up capital, professional staff, data collection, fractional reserve banking, liquid fixed-income markets) are often missing.
- Monetary policy tendencies and constraints:
  - Monetary policy in microstates tends to be procyclical rather than countercyclical (Calvo and Reinhart, 2002).
  - Policy is driven mainly by exchange rate considerations because transmission channels (lending, asset-price channels) are weak.
- FX market illiquidity example:
  - FX market in the Seychelles rupee in early 2009 is about US$300,000 per day; large transactions can cause spikes.
- Additional vulnerabilities:
  - High exchange rate pass-through and dollarization make depreciation risky: imports (food, fuel) are inelastic, service exports often invoiced in foreign currency, and balance-sheet mismatches from foreign-currency liabilities amplify risks.
  - Real wage rigidity undermines effectiveness of devaluation as an absorber of shocks.

### Advantages of hard pegs for microstates
- Hard pegs (dollarization, CBA, fixed peg) provide:
  - A nominal anchor reducing inflationary expectations and time-consistency problems.
  - Policy discipline and imported credibility (especially dollarization).
  - Reduced exchange rate volatility, encouraging trade and investment with anchor/reserve country.
- Many microstates fail the Marshall-Lerner condition; flexible exchange rates often do not improve trade balances due to inelastic tradable demand and necessity imports.
- Hard pegs remove most discretionary monetary policy; they differ in credibility, seignorage, reserve requirements, and institutional cost.

### Forms of hard peg — characteristics and trade-offs
- Dollarization (official — foreign currency as legal tender)
  - Credibility: Perfect
  - Seignorage: No
  - Interest premium: Low
  - Interest-rate decision: No
  - One-off cost of acquiring currency: Yes (if reserves insufficient)
  - Reserve coverage: N/A
  - FX convertibility: Fully convertible
  - Lender of Last Resort (LOLR): No
  - Staffing requirements: No staff
  - Transaction costs: None
  - Budgetary discipline: Yes
  - Monetary policy: None
  - Typical profile: very small populations (<150,000), often early dollarizers with political dependence/economic ties to reserve country; dedollarization is rare.
- Currency Board Arrangements (CBA)
  - Credibility: Very
  - Seignorage: Yes
  - Interest premium: Medium
  - Interest-rate decision: No
  - One-off cost of acquiring currency: Yes
  - Reserve coverage: 100% or more of the monetary base
  - FX convertibility: Fully convertible
  - LOLR: No
  - Staffing requirements: Small Currency Board Staff
  - Transaction costs: Low
  - Budgetary discipline: Yes
  - Monetary policy: Small (if capital markets imperfect)
  - Typical profile: historically widespread in British colonies; CBAs achieved low inflation and good growth empirically (Wolf et al., 2008).
- Fixed Exchange Rates (conventional peg)
  - Credibility: High
  - Seignorage: Yes
  - Interest premium: High
  - Interest-rate decision: Yes
  - One-off cost of acquiring currency: No
  - Reserve coverage: Variable foreign reserves
  - FX convertibility: Mostly fully convertible
  - LOLR: Yes
  - Staffing requirements: Large staff
  - Transaction costs: Low
  - Budgetary discipline: Yes (though less strong)
  - Monetary policy: Yes
  - Typical profile: more common since the 1970s among larger microstates; pegs have been enduring.

### Comparative implications of hard pegs
- Dollarization eliminates seignorage revenue (annual seignorage revenue losses for a typical microstate like Cape Verde estimated at about 1 percent of GDP in perpetuity).
- Interest premium ranking: dollarization (lowest) < CBA < hard peg (highest).
- Institutional/staffing cost ranking: fixed peg (highest) > CBA (low) > dollarization (none).
- LOLR capability: constrained under dollarization/CBA; possible under fixed peg but limited in practice due to FX defense needs.

### Empirics — multinomial probit panel estimation (GHK multivariate normal simulator)
- Sample: regime choices of 61 microstates for 1970–2006 (regimes: dollarized, CBA, fixed peg).
- Key hypothesized determinants: years since independence, population, former colonial power, financial sector development, fiscal balance, openness, size of economy, political stability.
- Data caveats: limited availability and quality of microstate statistics; potential selection bias; de jure and de facto regimes largely overlap in the sample.

- Main static-model findings (Table 6; coefficients report impact on utility of regime relative to fixed exchange rate):
  - Selected β1 (dollarized) and β2 (cba) estimates and standard errors:
    - Years since Independence: 0.064 (**) for dollarized; -0.146 (***) for CBA. (standard errors: (0.038) and (0.014))
    - Financial Sector Development: -0.578 (*** ) for dollarized; -0.009 for CBA. (std errors (0.238), (0.014))
    - Population: -0.003 (**) for dollarized; 0.000 for CBA. (std errors (0.000), (0.000))
    - Size of Economy: 0.000 (*) for dollarized; 0.000 (*) for CBA. (std errors (0.000), (0.000))
    - British Colony: 0.000 for dollarized; 1.407 (*** ) for CBA. (std errors (0.000), (0.265))
    - Openness: -0.053 (*** ) for dollarized; 0.004 for CBA. (std errors (0.021), (0.003))
    - Pconsumption: 0.054 for dollarized; 0.025 (*** ) for CBA. (std errors (0.083), (0.007))
    - Budget Balance: 47.528 (*** ) for dollarized; 2.648 (*** ) for CBA. (std errors (19.575), (1.542))
    - Constant: 10.705 (**) for dollarized; 1.574 (*** ) for CBA. (std errors (4.997), (0.509))
  - σ11 -0.1860.211
  - σ12 -0.1840.204
  - Log-likelihood: -181.885
  - Obs . (Dollarized, CBA, Fixed ER): 517/ 655/ 1695

- Main dynamic-model findings (Table 7; includes lagged dependent variable):
  - Selected estimates:
    - Lagged Dependent Variable: 2.425 (*** ) for dollarized; 4.693 (*** ) for CBA. (std errors (0.410), (0.568))
    - Years since Independence: 0.064 (*) for dollarized; -0.077 (*) for CBA. (std errors (0.038), (0.046))
    - Financial Sector Development: -0.582 (*** ) for dollarized; -0.048 for CBA. (std errors (0.238), (0.040))
    - Population: 0.000 (*** ) for dollarized; 0.000 for CBA. (std errors (0.000), (0.000))
    - Size of Economy: 0.000 (*) for dollarized; 0.000 for CBA. (std errors (0.000), (0.000))
    - British Colony: 0.000 for dollarized; 0.287 (*** ) for CBA. (std errors (0.000), (0.077))
    - Openness: -0.037 (*** ) for dollarized; 0.007 for CBA. (std errors (0.021), (0.009))
    - Pconsumption: 0.063 for dollarized; 0.011 (*** ) for CBA. (std errors (0.083), (0.020))
    - Budget Balance: 47.674 (*** ) for dollarized; 5.709 for CBA. (std errors (19.579), (4.757))
    - Constant: 10.556 (**) for dollarized; -1.072 (*** ) for CBA. (std errors (5.023), (1.715))
  - σ11 -0.2470.364
  - σ12 -0.2420.343
  - Log-likelihood: -34.214
  - Obs . (Dollarized, CBA, Fixed ER): 645/ 590/ 1474

### Robust empirical conclusions
- “Years of independence” matters:
  - Older countries are more likely to dollarize.
  - More recent independences increase probability of adopting a CBA.
  - Pegged exchange rates were popular among countries becoming independent in the 1970s–1980s.
- Financial-sector underdevelopment increases likelihood of dollarization (and to a lesser extent CBA).
- Very small populations increase likelihood of dollarization.
- Former British colonies are more likely to adopt CBAs.
- Openness is negatively related to dollarization.
- Larger public consumption (Pconsumption) increases probability of adopting a CBA.
- More conservative fiscal policies (higher budget balance) are associated with dollarization (and to a lesser extent CBA).
- Dynamic specification confirms static findings and highlights persistence in regime choice (strong positive lagged regime coefficients).

### Policy implications and conclusions
- Exchange rate choice for newly independent microstates is constrained by structural features (population size, financial development, colonial history, fiscal stance) rather than short-term policy levers.
- For the smallest microstates with limited human, institutional, and financial capabilities, full dollarization is often optimal—outsourcing exchange rate policy is advisable.
- Larger, more institutionally developed and rapidly growing microstates obtain increasing benefits from less hard pegs (CBA or conventional fixed peg).
- The study does not examine the causal impact of different exchange rate arrangements on macroeconomic performance; that remains a separate question.

*Source: _wp1012 - Box 1: Colonizers of Microstates (excerpted content from the supplied PDF).*

### Box 1: Colonizers of Microstates

### _wp1012 - Box 1: Colonizers of Microstates

### Colonizers of Microstates — empirical pattern
- Chart 1: Colonizer of Micro-States (Source: CIA Factook (2008))
  - UK 58%
  - Netherlands 8%
  - Portugal 8%
  - France 7%
  - USA 6%
  - Other 13%

### Political-economy of independence for microstates
- Most microstates became independent from the U.K., followed by Portugal, the Netherlands, France, and the U.S.
- U.S. cases were primarily U.S.-administered U.N. trusteeships (e.g., Palau, the Federated States of Micronesia).
- Possible determinants of differing independence outcomes:
  - French DOM-TOMs (“départements d'outre-mer, territoires d'outre-mer”) retain representation in the French parliament and subsidies that reduce appeal of independence.
  - The Commonwealth offers less financial benefit but a forum and “special relationship” that reduces perceived political costs of independence from the U.K.
  - Settler composition: DOM-TOMs often have a large share of “French stock” with strong links to mainland France; former British colonies often had settlers or resettled populations from Africa, Asia, or other colonies with weaker allegiance to the U.K.
- Historical context lowering costs and raising benefits of independence:
  - Rising fiscal pressures in colonizing powers reduced transfers to overseas territories.
  - Many microstates achieved independence peacefully, avoiding armed conflict costs.
  - Global factors: increased importance of punishing sovereignty violations (e.g., Kuwait), falling trade barriers, lower transport costs, and preferential agreements (Cotonou, Lomé, Economic Partnership Agreements) reduced economic costs of microstatehood.

### Exchange rate choices at independence — overview
- Typical post-independence exchange regime choices for microstates: dollarization (foreign legal tender), currency board arrangements (CBA), or fixed exchange rates (pegs).
- Motivations for creating a territorial currency:
  - National identity, trust and psychological identification with nation-state (Helleiner, 2004).
  - Seignorage revenue (example: Cape Verde estimated close to 1 percent of GDP per annum).
  - Possibility of independent monetary policy (interest rate adjustments, money supply increases), though practical benefits are limited for microstates.

### Problems of floating exchange rates in microstates
- Institutional prerequisites for floating (central bank start-up capital, professional staff, data collection, fractional reserve banking, liquid fixed-income markets) are often missing.
- Monetary policy in microstates tends to be:
  - Procyclical rather than countercyclical (Calvo and Reinhart, 2002).
  - Driven mainly by exchange rate considerations because transmission channels (lending, asset-price channels) are weak.
- FX market illiquidity: example — FX market in the Seychelles rupee in early 2009 is about US$300,000 per day; large transactions can cause spikes.
- High exchange rate pass-through and dollarization make depreciation risky: imports (food, fuel) are inelastic, service exports often invoiced in foreign currency, and balance-sheet mismatches from foreign-currency liabilities amplify risks.
- Real wage rigidity undermines effectiveness of devaluation as an absorber of shocks.

### Advantages of hard pegs for microstates
- Hard pegs (dollarization, CBA, fixed peg) provide:
  - A nominal anchor reducing inflationary expectations and time-consistency problems.
  - Policy discipline and imported credibility (especially dollarization).
  - Reduced exchange rate volatility, encouraging trade and investment with anchor/reserve country.
- Many microstates fail the Marshall-Lerner condition; flexible exchange rates often do not improve trade balances due to inelastic tradable demand and necessity imports.
- Hard pegs remove most discretionary monetary policy; they differ in credibility, seignorage, reserve requirements, and institutional cost.

### Forms of hard peg — characteristics and trade-offs
- Dollarization (official — foreign currency as legal tender)
  - Credibility: Perfect
  - Seignorage: No
  - Interest premium: Low
  - Interest-rate decision: No
  - One-off cost of acquiring currency: Yes (if reserves insufficient)
  - Reserve coverage: N/A
  - FX convertibility: Fully convertible
  - Lender of Last Resort (LOLR): No
  - Staffing requirements: No staff
  - Transaction costs: None
  - Budgetary discipline: Yes
  - Monetary policy: None
  - Typical profile: very small populations (<150,000), often early dollarizers with political dependence/economic ties to reserve country; dedollarization is rare.
- Currency Board Arrangements (CBA)
  - Credibility: Very
  - Seignorage: Yes
  - Interest premium: Medium
  - Interest-rate decision: No
  - One-off cost of acquiring currency: Yes
  - Reserve coverage: 100% or more of the monetary base
  - FX convertibility: Fully convertible
  - LOLR: No
  - Staffing requirements: Small Currency Board Staff
  - Transaction costs: Low
  - Budgetary discipline: Yes
  - Monetary policy: Small (if capital markets imperfect)
  - Typical profile: historically widespread in British colonies; CBAs achieved low inflation and good growth empirically (Wolf et al., 2008).
- Fixed Exchange Rates (conventional peg)
  - Credibility: High
  - Seignorage: Yes
  - Interest premium: High
  - Interest-rate decision: Yes
  - One-off cost of acquiring currency: No
  - Reserve coverage: Variable foreign reserves
  - FX convertibility: Mostly fully convertible
  - LOLR: Yes
  - Staffing requirements: Large staff
  - Transaction costs: Low
  - Budgetary discipline: Yes (though less strong)
  - Monetary policy: Yes
  - Typical profile: more common since the 1970s among larger microstates; pegs have been enduring.

### Comparative implications of hard pegs
- Dollarization eliminates seignorage revenue (annual seignorage revenue losses for a typical microstate like Cape Verde estimated at about 1 percent of GDP in perpetuity).
- Interest premium ranking: dollarization (lowest) < CBA < hard peg (highest).
- Institutional/staffing cost ranking: fixed peg (highest) > CBA (low) > dollarization (none).
- LOLR capability: constrained under dollarization/CBA; possible under fixed peg but limited in practice due to FX defense needs.

### Empirics — multinomial probit panel estimation (GHK multivariate normal simulator)
- Sample: regime choices of 61 microstates for 1970–2006 (regimes: dollarized, CBA, fixed peg).
- Key hypothesized determinants: years since independence, population, former colonial power, financial sector development, fiscal balance, openness, size of economy, political stability.
- Data caveats: limited availability and quality of microstate statistics; potential selection bias; de jure and de facto regimes largely overlap in the sample.

- Main static-model findings (Table 6; qualitative interpretation recorded below; coefficients report impact on utility of regime relative to fixed exchange rate):
  - β1 (dollarized) and β2 (cba) coefficients (selected):
    - Years since Independence: 0.064 (**) for dollarized; -0.146 (***) for CBA. (standard errors: (0.038) and (0.014))
    - Financial Sector Development: -0.578 (*** ) for dollarized; -0.009 for CBA. (std errors (0.238), (0.014))
    - Population: -0.003 (**) for dollarized; 0.000 for CBA. (std errors (0.000), (0.000))
    - Size of Economy: 0.000 (*) for dollarized; 0.000 (*) for CBA. (std errors (0.000), (0.000))
    - British Colony: 0.000 for dollarized; 1.407 (*** ) for CBA. (std errors (0.000), (0.265))
    - Openness: -0.053 (*** ) for dollarized; 0.004 for CBA. (std errors (0.021), (0.003))
    - Pconsumption: 0.054 for dollarized; 0.025 (*** ) for CBA. (std errors (0.083), (0.007))
    - Budget Balance: 47.528 (*** ) for dollarized; 2.648 (*** ) for CBA. (std errors (19.575), (1.542))
    - Constant: 10.705 (**) for dollarized; 1.574 (*** ) for CBA. (std errors (4.997), (0.509))
  - σ11 -0.1860.211
  - σ12 -0.1840.204
  - Log-likelihood: -181.885
  - Obs . (Dollarized, CBA, Fixed ER): 517/ 655/ 1695

- Main dynamic-model findings (Table 7; includes lagged dependent variable):
  - Lagged Dependent Variable: 2.425 (*** ) for dollarized; 4.693 (*** ) for CBA. (std errors (0.410), (0.568))
  - Years since Independence: 0.064 (*) for dollarized; -0.077 (*) for CBA. (std errors (0.038), (0.046))
  - Financial Sector Development: -0.582 (*** ) for dollarized; -0.048 for CBA. (std errors (0.238), (0.040))
  - Population: 0.000 (*** ) for dollarized; 0.000 for CBA. (std errors (0.000), (0.000))
  - Size of Economy: 0.000 (*) for dollarized; 0.000 for CBA. (std errors (0.000), (0.000))
  - British Colony: 0.000 for dollarized; 0.287 (*** ) for CBA. (std errors (0.000), (0.077))
  - Openness: -0.037 (*** ) for dollarized; 0.007 for CBA. (std errors (0.021), (0.009))
  - Pconsumption: 0.063 for dollarized; 0.011 (*** ) for CBA. (std errors (0.083), (0.020))
  - Budget Balance: 47.674 (*** ) for dollarized; 5.709 for CBA. (std errors (19.579), (4.757))
  - Constant: 10.556 (**) for dollarized; -1.072 (*** ) for CBA. (std errors (5.023), (1.715))
  - σ11 -0.2470.364
  - σ12 -0.2420.343
  - Log-likelihood: -34.214
  - Obs . (Dollarized, CBA, Fixed ER): 645/ 590/ 1474

- Robust empirical conclusions reported:
  - “Years of independence” matters:
    - Older countries are more likely to dollarize.
    - More recent independences increase probability of adopting a CBA.
    - Pegged exchange rates were popular among countries becoming independent in the 1970s–1980s.
  - Financial-sector underdevelopment increases likelihood of dollarization (and to a lesser extent CBA).
  - Very small populations increase likelihood of dollarization.
  - Former British colonies are more likely to adopt CBAs.
  - Openness is negatively related to dollarization.
  - Larger public consumption (Pconsumption) increases probability of adopting a CBA.
  - More conservative fiscal policies (higher budget balance) are associated with dollarization (and to a lesser extent CBA).
  - Dynamic specification confirms static findings and highlights persistence in regime choice (strong positive lagged regime coefficients).

### Policy implications and conclusions
- Exchange rate choice for newly independent microstates is constrained by structural features (population size, financial development, colonial history, fiscal stance) rather than short-term policy levers.
- For the smallest microstates with limited human, institutional, and financial capabilities, full dollarization is often optimal—outsourcing exchange rate policy is advisable.
- Larger, more institutionally developed and rapidly growing microstates obtain increasing benefits from less hard pegs (CBA or conventional fixed peg).
- The study does not examine the causal impact of different exchange rate arrangements on macroeconomic performance; that remains a separate question.

*Source: _wp1012 - Box 1: Colonizers of Microstates (excerpted content from the supplied PDF).*

### 1492. Britis h  s ettlemen t o f th e is lan d s  b eg an  in  1647; th e is lan d s  b ecame a co lo n y  in  1783. Sin

### 1492. Britis h  s ettlemen t o f th e is lan d s  b eg an  in  1647; th e is lan d s  b ecame a co lo n y  in  1783. Sin

### Historical colonization and independence
- 1492. Britis h  s ettlemen t o f th e is lan d s  b eg an  in  1647; th e is lan d s  b ecame a co lo n y  in  1783. Sin ce attain in g  in d ep en d en ce fro m the UK in  1973, Th e Bah amas  h av e p ro s p ered  th ro u g h  to u ris m an d  in tern atio n al b an kin g  an d  in v es tmen t man agem en t. Because of its geography, the country at times has been a major transshipment point for illegal drugs, particularly shipments to the US and Europe, and for smuggling illegal migrants into the US.

### Country summaries — years of independence and former sovereign
- Bah rain — 1971 — UK
  - In  1783, th e al-Kh alifa family  cap tu red  Bah rain  fro m th e Pers ian s . In  o rd er to  s ecu re th es e h o ld in g s , it en tered  in to  a s eries  of treaties with the UK during the 19th century that made Bahrain a British protectorate. The archipelago attained its in d ep en d en ce in  1971. Bah rain 's  s mall s ize an d  cen tral lo catio n  amo n g  Pers ian  Gu lf co u n tries  req u ire it to  p lay  a d elicate balancing act in foreign affairs among its larger neighbors. Facing declining oil reserves, Bahrain has turned to petroleum processing and refining and has transformed itself into an international banking center. King HAMAD bin Isa al-Khalifa, after coming to power in 1999, pushed economic and political reforms to improve relations with the Shi'a community. Shi'a p o litical s o cieties  p articip ated  in  2006 p arliamen tary  an d  mu n icip al electio n s . A l W ifaq , th e larg es t Sh i'a p o litical s o ciety , won the largest number of seats in the elected chamber of the legislature. However, Shi'a discontent has resurfaced with street demonstrations and occasional low-level violence in recent years.

- Barbados — 1966 — UK (1627)
  - The island was uninhabited when first settled by the British in 1627. Slaves worked the sugar plantations established on the is lan d  u n til 1834 wh en  s lav ery  was  ab o lis h ed . Th e eco n o my  remain ed  h eav ily  d ep en d en t o n  s u g ar, ru m, an d  mo las s es  production through most of the 20th century. The gradual introduction of social and political reforms in the 1940s and 1950s  led  to  co mp lete in d ep en d en ce fro m th e UK in  1966. In  th e 1990s , to u ris m an d  man u factu rin g  s u rp as s ed  th e s u g ar industry in economic importance.

- Belize — 1981 — UK (1854)
  - Belize was the site of several Mayan city states until their decline at the end of the first millennium A.D. The British and Spanish disputed the region in the 17th and 18th centuries; it formally became the colony of British Honduras in 1854. Territo rial d is p u tes  b etween  th e UK an d  Gu atemala d elay ed  th e in d ep en d en ce o f Belize u n til 1981. Gu atemala refu s ed  to  recognize the new nation until 1992. Tourism has become the mainstay of the economy. Current concerns include high foreign debt, high unemployment, growing involvement in the South American drug trade, growing urban crime, and increasing incidences of HIV/AIDS.

- Bermuda — overs eas  territory of the UK — UK
  - Bermu d a was  firs t s ettled  in 1609 b y  s h ip wrecked  En g lis h  co lo n is ts  h ead ed  fo r Virg in ia. To u ris m to  th e is lan d  to  es cap e North American winters first developed in Victorian times. Tourism continues to be important to the island's economy, although international business has overtaken it in recent years. Bermuda has developed into a highly successful offshore fin an cial cen ter. A lth o u g h  a referen d u m o n  in d ep en d en ce fro m th e UK was  s o u n d ly  d efeated  in 1995, th e p res en t government has reopened debate on the issue.

- Bhutan — 1907 — (became a unified kingdom under its first hereditary king)
  - In  1865, Britain  an d  Bh u tan  s ig n ed  th e Treaty  o f Sin ch u lu , u n d er wh ich  Bh u tan  wo u ld  r eceive an annual subsidy in exchange for ceding some border land to British India. Under British influence, a monarchy was set up in 1907; three years later, a treaty was signed whereby the British agreed not to interfere in Bhutanese internal affairs and Bhutan allowed Britain to direct its foreign affairs . This role was assumed by independent India after 1947. Two years later, a formal Indo-Bhutanese accord returned the areas of Bhutan annexed by the British, formalized the annual subsidies the country received, and defined India's responsibilities in defense and foreign relations. A refugee issue of over 100,000 Bh u tan es e in Nepal remains unresolved; 90% of the refugees are housed in seven United Nations Office of the High Commissioner for Refu g ees  (UNHCR) camp s . In  March  2005, Kin g  Jig me Sin g y e W A NGCHUCK u n v eiled  th e g o v ern men t's  d raft co n s titu tio n  - which would introduce major democratic reforms - and pledged to hold a national referendum for its approval. In December 2006, the King abdicated the throne to his son, Jigme Khesar Namgyel WANGCHUCK, in order to give him experience as h ead  o f s tate b efo re th e d emo cratic tran s itio n . In  early  2007, In d ia an d  Bh u tan  ren eg o tiated  th eir treaty  to  allo w Bh u tan  greater autonomy in conducting its foreign policy, although Thimphu continues to coordinate policy decisions in this area with New Delh i. In  Ju ly  2007, s ev en  min is ters  o f Bh u tan 's  ten -memb er cab in et res ig n ed  to  jo in  th e p o litical p ro ces s , leav in g  the remaining cabinet to act as a caretaker regime until a new government assumes power following parliamentary elections. Bh u tan  will co mp lete its tran s itio n  to  fu ll d emo cracy  in  2008, wh en  its  firs t fu lly  d emo cratic electio n s  to  a n ew p arliamen t - exp ected  to  b e co mp leted  b y  March  2008 - an d  a co n co mitan t referen d u m o n  th e d raft co n s titu tio n  will take p l ace.

- Bots wan a — 1966 — UK
  - F orm erly t h e B r i t i s h protectorate of Bechuanaland, Botswana adopted its new name upon independence in 1966. Four decades of uninterrupted civilian leadership, progressive social policies, and significant capital investment have created one of the most dynamic economies in Africa. Mineral extraction, principally diamond mining, dominates economic activity, though tourism is a growing sector due to the country's conservation practices and extensive nature preserves. Botswana has one of the world's highest known rates of HIV/AIDS infection, but also one of Africa's most progressive and comprehensive programs for dealing with the disease.

- Bru nei — 1984 — UK (1888)
  - The Sultanate of Brunei's influence peaked between the 15th and 17th centuries when its control extended over coastal areas of northwest Borneo and the southern Philippines. Brunei subsequently entered a period of decline brought on by internal strife over royal succession, colonial expansion of European powers, and piracy. In 1888, Brunei became a British protectorate; independence was achieved in 1984. The same family has ruled Brunei for over six centuries. Brunei benefits from extensive petroleum and natural gas fields, the source of one of the highest per capita GDPs in Asia.

- Cape Verd e — 1975 — Portu gal
  - The uninhabited islands were discovered and colonized by the Portuguese in the 15th century; Cape Verde subsequently became a trading center for African slaves and later an important coaling and resupply stop for whaling and transatlantic shipping. Following independence in 1975, and a tentative interest in unification with Guinea-Bissau, a one-party system was established and maintained until multi-party elections were held in 1990. Cape Verd e co ntin ues  to  exhibit one o f Africa's most stable democratic governments. Repeated droughts during the second half of the 20th century caused significant hardship and prompted heavy emigration. As a result, Cape Verde's expatriate population is greater than its domestic one. Most Cape Verdeans have both African and Portuguese antecedents.

- Comoros — 1975 — France
  - Comoros has endured more than 20 coups or attempted coups since gaining independence from France in 1975. In 1997, the islands of Anjouan and Moheli declared independence from Comoros. In 1999, military chief Col. AZALI seized power in a bloodless coup, and helped negotiate the 2000 Fomboni Accords power-sharing agreement in which the federal presidency rotates among the three islands, and each island maintains its own local government. AZALI won the 2002 Presidential election, and each island in the archipelago elected its own president. AZALI stepped down in 2006 and President SAMBI took office. Since 2006, Anjouan's President Mohamed BACAR has refused to work effectively with the Union presidency. In 2007, BACAR effected Anjouan's de-facto secession from the Union, refusing to step down in favor of fresh Anjouanais elections when Comoros' other islands held legitimate elections in July. The African Union (AU) initially attempted to resolve the political crisis by applying sanctions and a naval blockade on Anjouan, but in March 2008, AU and Comoran soldiers seized the island. The move was generally welcomed by the island's inhabitants.

- Cyp ru s — 1960 — UK
  - A former British colony, Cyprus became independent in 1960 following years of resistance to British rule. Tens ion s between the Greek Cypriot majority and Turkish Cypriot minority came to a head in December 1963, when violence broke out in the capital of Nicos ia. Des pite the deployment of UN peacekeepers in 1964, sporadic intercommunal violence continued forcing most Turkish Cypriots into enclaves throughout the island. In 1974, a Greek Government-sponsored attempt to seize control of Cyprus was met by military intervention from Turkey, which soon controlled more than a third of the island. In 1983, the Turkish-held area declared itself the "Turkish Republic of Northern Cyprus" (TRNC), but it is recognized only by Turkey. The latest two-year round of UN-brokered talks - between the leaders of the Greek Cypriot and Turkish Cypriot communities to reach an agreement to reunite the divided island - ended when the Greek Cypriots rejected the UN settlement plan in an April 2004 referendum. The entire island entered the EU on 1 May 2004, although the EU acquis - the body of common rights and obligations - applies only to the areas under direct government control, and is suspended in the areas administered by Turkish Cypriots. However, individual Turkish Cypriots able to document their eligibility for Republic of Cyprus citizenship legally enjoy the same rights accorded to other citizens of European Union states. The election of a new Cy priot president in 2008 served as the impetus for the UN to encourage both the Turkish and Cypriot Governments to reopen unification negotiations.

- Djib ou ti — 1977 — France
  - The French Territory of the Afars and the Issas became Djibouti in 1977. Hassan Gouled APTIDON installed an authoritarian one-party state and proceeded to serve as president until

*Italic: Content derived from the provided IMF PDF chapter text.*

### 1999. Unres t amo ng the A fars  min ority d uring the

### _wp1012 - 1999. Unres t amo ng the A fars  min ority d uring the

### Djibouti: unrest among the Afar minority and political context
- 1999 unrest among the Afars minority during the 1990s led to a civil war that ended in 2001 following the conclusion of a peace accord between Afar rebels and the Issa-dominated government.
- In 1999, Djibouti's first multi-party presidential elections resulted in the election of Ismail Omar GUELLEH; he was re-elected to a second and final term in 2005.
- Strategic geography and international ties:
  - Djibouti occupies a strategic geographic location at the mouth of the Red Sea and serves as an important transshipment location for goods entering and leaving the east African highlands.
  - The present leadership favors close ties to France, which maintains a significant military presence in the country, but also has strong ties with the US.
  - Djibouti hosts the only US military base in sub-Saharan Africa and is a front-line state in the global war on terrorism.

### Country profiles (selected excerpts from CIA Factbook)
- Equatorial Guinea
  - Year of Independence: 1968
  - Country from which became independence: Spain
  - Recent Background History:
    - Equatorial Guinea gained independence in 1968 after 190 years of Spanish rule.
    - President Teodoro OBIANG NGUEMA MBASOGO has ruled the country since 1979 when he seized power in a coup.
    - Although nominally a constitutional democracy since 1991, the 1996 and 2002 presidential elections - as well as the 1999 and 2004 legislative elections - were widely seen as flawed.
    - The president exerts almost total control over the political system and has discouraged political opposition.
    - Equatorial Guinea has experienced rapid economic growth due to the discovery of large offshore oil reserves, and in the last decade has become Sub-Saharan Africa's third largest oil exporter.
    - Despite the country's economic windfall from oil production resulting in a massive increase in government revenue in recent years, there have been few improvements in the population's living standards.

- Eritrea
  - Year of Independence: 1993
  - Country from which became independence: Ethiopia
  - Recent Background History:
    - Eritrea was awarded to Ethiopia in 1952 as part of a federation; Ethiopia's annexation of Eritrea as a province 10 years later sparked a 30-year struggle for independence that ended in 1991.
    - Independence was overwhelmingly approved in a 1993 referendum.
    - A two-and-a-half-year border war with Ethiopia that erupted in 1998 ended under UN auspices in December 2000.
    - Eritrea currently hosts a UN peacekeeping operation that is monitoring a 25 km-wide Temporary Security Zone (TSZ) on the border with Ethiopia.
    - An international commission posted its findings in 2002, but both parties have been unable to reach agreement on implementing the decision.
    - On 30 November 2007, the Eritrea-Ethiopia Boundary Commission remotely demarcated the border by coordinates and dissolved itself, leaving Ethiopia still occupying several tracts of disputed territory, including the town of Badme.
    - Eritrea accepted the EEBC's "virtual demarcation" decision and called on Ethiopia to remove its troops from the TSZ which it states is Eritrean territory. Ethiopia has not accepted the virtual demarcation decision.

- Estonia
  - Year of Independence: 1991
  - Country from which became independence: Soviet Union
  - Recent Background History:
    - After centuries of Danish, Swedish, German, and Russian rule, Estonia attained independence in 1918.
    - Forcibly incorporated into the USSR in 1940 - an action never recognized by the US - it regained its freedom in 1991, with the collapse of the Soviet Union.
    - Since the last Russian troops left in 1994, Estonia has been free to promote economic and political ties with Western Europe.
    - It joined both NATO and the EU in the spring of 2004.

- Fiji
  - Year of Independence: 1970
  - Country from which became independence: UK
  - Recent Background History:
    - Fiji became independent in 1970, after nearly a century as a British colony.
    - Democratic rule was interrupted by two military coups in 1987, caused by concern over a government perceived as dominated by the Indian community.
    - A new constitution enacted in 1997 was more equitable. Free and peaceful elections in 1999 resulted in a government led by an Indo-Fijian, but a civilian-led coup in May 2000 ushered in prolonged political turmoil.
    - Parliamentary elections held in August 2001 provided Fiji with a democratically elected government led by Prime Minister Laisenia QARASE.
    - Re-elected in May 2006, QARASE was ousted in a December 2006 military coup led by Commodore Voreqe BAINIMARAMA, who initially appointed himself acting president.
    - In January 2007, BAINIMARAMA was appointed interim prime minister.

- Gabon
  - Year of Independence: 1960
  - Country from which became independence: France
  - Recent Background History:
    - Only two autocratic presidents have ruled Gabon since independence from France in 1960.
    - The current president, El Hadj Omar BONGO Ondimba, has dominated the country's political scene for four decades.
    - President BONGO introduced a nominal multiparty system and a new constitution in the early 1990s.
    - Allegations of electoral fraud during local elections in 2002-03 and the presidential elections in 2005 have exposed weaknesses of formal political structures in Gabon.
    - Gabon's political opposition remains weak, divided, and financially dependent on the current regime.
    - Despite political conditions, a small population, abundant natural resources, and considerable foreign support have helped make Gabon one of the more prosperous and stable African countries.

- The Gambia
  - Year of Independence: 1965
  - Country from which became independence: UK
  - Recent Background History:
    - The Gambia gained its independence from the UK in 1965.
    - It formed a short-lived federation of Senegambia between 1982 and 1989.
    - Yahya A. J. J. JAMMEH led a military coup in 1994 that overthrew the president and banned political activity.
    - A new constitution and presidential elections in 1996, followed by parliamentary balloting in 1997, completed a nominal return to civilian rule.
    - JAMMEH has been elected president in all subsequent elections, including most recently in late 2006.

- Guinea-Bissau
  - Year of Independence: 1974
  - Country from which became independence: Portugal
  - Recent Background History:
    - Since independence from Portugal in 1974, Guinea-Bissau has experienced considerable political and military upheaval.
    - In 1980, a military coup established authoritarian dictator Joao Bernardo 'Nino' VIEIRA as president.
    - VIEIRA's regime suppressed political opposition and purged political rivals; several coup attempts through the 1980s and early 1990s failed to unseat him.
    - In 1994 VIEIRA was elected president in the country's first free elections.
    - A military mutiny and resulting civil war in 1998 led to VIEIRA's ouster in May 1999.
    - In February 2000, a transitional government turned over power to opposition leader Kumba YALA after he was elected president in transparent polling.
    - In September 2003, after only three years in office, YALA was ousted by the military in a bloodless coup, and businessman Henrique ROSA was sworn in as interim president.
    - In 2005, former President VIEIRA was re-elected president pledging to pursue economic development and national reconciliation.

- Guyana
  - Year of Independence: 1966
  - Country from which became independence: UK(1815)
  - Recent Background History:
    - Originally a Dutch colony in the 17th century, by 1815 Guyana had become a British possession.
    - The abolition of slavery led to black settlement of urban areas and the importation of indentured servants from India to work the sugar plantations; this ethnocultural divide has persisted and led to turbulent politics.
    - Guyana achieved independence from the UK in 1966, and since then it has been ruled mostly by socialist-oriented governments.
    - In 1992, Cheddi JAGAN was elected president in what is considered the country's first free and fair election since independence.
    - After his death five years later, his wife, Janet JAGAN, became president but resigned in 1999 due to poor health. Her successor, Bharrat JAGDEO, was reelected in 2001 and again in 2006.

- Iceland
  - Year of Independence: 1944
  - Country from which became independence: Denmark
  - Recent Background History:
    - Settled by Norwegian and Celtic immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world's oldest functioning legislative assembly, the Althing, established in 930.
    - Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark.
    - Full independence was attained in 1944. Literacy, longevity, income, and social cohesion are first-rate by world standards.

- Kiribati
  - Year of Independence: 1979
  - Country from which became independence: UK
  - Recent Background History:
    - The Gilbert Islands were granted self-rule by the UK in 1971 and complete independence in 1979 under the new name of Kiribati.
    - The US relinquished all claims to the sparsely inhabited Phoenix and Line Island groups in a 1979 treaty of friendship with Kiribati.

- Kuwait
  - Year of Independence: 1961
  - Country from which became independence: UK
  - Recent Background History:
    - Britain oversaw foreign relations and defense for the ruling Al-Sabah dynasty from 1899 until independence in 1961.
    - Kuwait was attacked and overrun by Iraq on 2 August 1990.
    - A US-led, UN coalition began a ground assault on 23 February 1991 that liberated Kuwait in four days.
    - Kuwait spent more than $5 billion to repair oil infrastructure damaged during 1990-91.
    - The Al-Sabah family has ruled since returning to power in 1991 and reestablished an elected legislature that in recent years has become increasingly assertive.

- Lesotho
  - Year of Independence: 1966
  - Country from which became independence: UK
  - Recent Background History:
    - Basutoland was renamed the Kingdom of Lesotho upon independence from the UK in 1966.
    - Constitutional government was restored in 1993 after seven years of military rule.
    - In 1998, violent protests and a military mutiny following a contentious election prompted a brief but bloody intervention by South African and Botswanan military forces under the aegis of the Southern African Development Community.
    - Subsequent constitutional reforms restored relative political stability.
    - Peaceful parliamentary elections were held in 2002, but the National Assembly elections of February 2007 were hotly contested and aggrieved parties continue to periodically demonstrate their distrust of the results.

- Luxembourg
  - Year of Independence: 1839
  - Country from which became independence: Netherlands
  - Recent Background History:
    - Founded in 963, Luxembourg became a grand duchy in 1815 and an independent state under the Netherlands.
    - It lost more than half of its territory to Belgium in 1839, but gained a larger measure of autonomy. Full independence was attained in 1867.
    - It entered into the Benelux Customs Union and joined NATO in 1948-1949, and in 1957 became one of the six founding countries of the European Economic Community.
    - In 1999 it joined the euro currency area.

- Maldives
  - Year of Independence: 1965
  - Country from which became independence: UK
  - Recent Background History:
    - The Maldives was long a sultanate, first under Dutch and then under British protection. It became a republic in 1968, three years after independence.
    - Since 1978, President Maumoon Abdul GAYOOM - currently in his sixth term in office - has dominated the islands' political scene.
    - Following riots in the capital Male in August 2004, the president and his government pledged democratic reforms; political parties were legalized in 2005.
    - A "special majlis" pledged to complete drafting of a new constitution by the end of 2007 and first-ever presidential elections under a multi-candidate, multi-party system were slated for November 2008.
    - Tourism and fishing are being developed on the archipelago.

- Malta
  - Year of Independence: 1964
  - Country from which became independence: UK
  - Recent Background History:
    - Great Britain formally acquired possession of Malta in 1814. The island supported the UK through both World Wars and remained in the Commonwealth when it became independent in 1964.
    - Malta became a republic a decade later.
    - Since about the mid-1980s, the island has transformed itself into a freight transshipment point, a financial center, and a tourist destination.
    - Malta became an EU member in May 2004 and began to use the euro as currency in 2008.

- Marshall Islands
  - Year of Independence: 1986
  - Country from which became independence: US (from the US-administered UN trusteeship)
  - Recent Background History:
    - After almost four decades under US administration as the easternmost part of the UN Trust Territory of the Pacific Islands, the Marshall Islands attained independence in 1986 under a Compact of Free Association.
    - Compensation claims continue as a result of US nuclear testing on some of the atolls between 1947 and 1962.
    - The Marshall Islands hosts the US Army Kwajalein Atoll (USAKA) Reagan Missile Test Site, a key installation in the US missile defense network.

- Mauritius
  - Year of Independence: 1968
  - Country from which became independence: UK
  - Recent Background History:
    - Mauritius was first explored by the Portuguese in the 16th century and subsequently settled by the Dutch, then French, and captured by the British in 1810.
    - Independence from the UK was attained in 1968.
    - A stable democracy with regular free elections and a positive human rights record, the country has attracted considerable foreign investment and earned one of Africa's highest per capita incomes.
    - Recent poor weather, declining sugar prices, and declining textile and apparel production have slowed economic growth, leading to some protests over standards of living in the Creole community.

- Micronesia, Federated States of
  - Year of Independence: 1986
  - Country from which became independence: US (from the US-administered UN trusteeship)
  - Recent Background History:
    - In 1979 the Federated States of Micronesia adopted a constitution. In 1986 independence was attained under a Compact of Free Association with the US, which was amended and renewed in 2004.
    - Present concerns include large-scale unemployment, overfishing, and overdependence on US aid.

- Namibia
  - Year of Independence: 1990
  - Country from which became independence: South Africa
  - Recent Background History:
    - South Africa occupied the German colony of South-West Africa during World War I and administered it as a mandate until after World War II, when it annexed the territory.
    - In 1966 the Marxist South-West Africa People's Organization (SWAPO) launched a war of independence.
    - South Africa agreed to end its administration in accordance with a UN peace plan in 1988. Namibia has been governed by SWAPO since independence in 1990.
    - Hifikepunye POHAMBA was elected president in November 2004 in a landslide victory replacing Sam NUJOMA who led the country during its first 14 years of self rule.

- Netherlands Antilles
  - Year of Independence/canonical status: part of the Kingdom of the Netherlands
  - Country from which became independence: Netherlands
  - Recent Background History:
    - Once the center of the Caribbean slave trade, Curacao was hard hit by the abolition of slavery in 1863.
    - Its prosperity was restored in the early 20th century with the construction of oil refineries to service Venezuelan oil fields.
    - The island of Saint Martin is shared with France; its southern portion is named Sint Maarten and is part of the Netherlands Antilles; its northern portion, called Saint Martin, is an overseas collectivity of France.

- Oman
  - Year of Independence: 1650
  - Country from which became independence: Portugal (expulsion of the Portuguese)
  - Recent Background History:
    - In the late 18th century, a newly established sultanate in Muscat signed the first in a series of friendship treaties with Britain.
    - In 1970, Qaboos bin Said al-Said overthrew his father; he has ruled as sultan ever since.
    - His extensive modernization program has opened the country to the outside world while preserving longstanding close ties with the UK.

- Palau
  - Year of Independence: 1944
  - Country from which became independence: US (from the US-administered UN trusteeship)
  - Recent Background History:
    - After three decades as part of the UN Trust Territory of the Pacific under US administration, Palau opted for independence in 1978 rather than join the Federated States of Micronesia.
    - A Compact of Free Association with the US was approved in 1986, but not ratified until 1993. It entered into force the following year, when the islands gained independence.

- Qatar
  - Year of Independence: 1971
  - Country from which became independence: UK
  - Recent Background History:
    - Ruled by the al-Thani family since the mid-1800s, Qatar transformed from a poor British protectorate noted mainly for pearling into an independent state with significant oil and natural gas revenues.
    - During the late 1980s and early 1990s, the Qatari economy was crippled by a continuous siphoning off of petroleum revenues by the Amir, who had ruled the country since 1972.
    - His son, the current Amir HAMAD bin Khalifa al-Thani, overthrew him in a bloodless coup in 1995.
    - In 2001, Qatar resolved its long standing border disputes with both Bahrain and Saudi Arabia.
    - As of 2007, oil and natural gas revenues had enabled Qatar to attain the highest per capita income in the world.

- Samoa
  - Year of Independence: 1962
  - Country from which became independence: New Zealand (from New Zealand-administered UN trusteeship)
  - Recent Background History:
    - New Zealand occupied the German protectorate of Western Samoa at the outbreak of World War I in 1914 and administered the islands until 1962, when they became independent.
    - The country dropped the "Western" from its name in 1997.

- Sao Tome and Principe
  - Year of Independence: 1975
  - Country from which became independence: Portugal
  - Recent Background History:
    - Independence was achieved in 1975; democratic reforms were not instituted until the late 1980s.
    - The country held its first free elections in 1991, but frequent internal wrangling precipitated repeated changes in leadership and two failed coup attempts in 1995 and 2003.
    - The recent discovery of oil in the Gulf of Guinea promises to attract increased attention to the small island nation.

- Seychelles
  - Year of Independence: 1976
  - Country from which became independence: UK
  - Recent Background History:
    - Independence came in 1976. Socialist rule was brought to a close with a new constitution and free elections in 1993.
    - President France-Albert RENE, who had served since 1977, was re-elected in 2001 but stepped down in 2004. Vice President James MICHEL took over the presidency and in July 2006 was elected to a new five-year term.

- Solomon Islands
  - Year of Independence: 1978
  - Country from which became independence: UK
  - Recent Background History:
    - Self-government was achieved in 1976 and independence two years later.
    - Ethnic violence, government malfeasance, and endemic crime undermined stability and civil society.
    - In June 2003, then Prime Minister Sir Allan KEMAKEZA sought the assistance of Australia; an Australian-led multinational force arrived in July 2003 to restore peace and disarm ethnic militias.
    - The Regional Assistance Mission to the Solomon Islands (RAMSI) has generally been effective in restoring law and order and rebuilding government institutions.

- Suriname
  - Year of Independence: 1975
  - Country from which became independence: Netherlands
  - Recent Background History:
    - First explored by the Spaniards in the 16th century and then settled by the English in the mid-17th century, Suriname became a Dutch colony in 1667.
    - Independence from the Netherlands was granted in 1975. Five years later the civilian government was replaced by a military regime that soon declared a socialist republic.
    - International pressure forced a democratic election in 1987. In 1990, the military overthrew civilian leadership, but a democratically elected government returned to power in 1991 and has ruled since; the coalition expanded to eight parties in 2005.

- Swaziland
  - Year of Independence: 1968
  - Country from which became independence: UK
  - Recent Background History:
    - Independence was granted in 1968. Student and labor unrest during the 1990s pressured King MSWATI III to grudgingly allow political reform and greater democracy, although he has backslid on promises in recent years.
    - A constitution came into effect in 2006, but political parties remain banned.
    - Swaziland recently surpassed Botswana as the country with the world's highest known HIV/AIDS prevalence rate.

- Trinidad and Tobago
  - Year of Independence: 1962
  - Country from which became independence: UK
  - Recent Background History:
    - First colonized by the Spanish, the islands came under British control in the early 19th century. Independence was attained in 1962.
    - The country is one of the most prosperous in the Caribbean thanks largely to petroleum and natural gas production and processing.
    - Tourism, mostly in Tobago, is targeted for expansion and is growing.

- Vanuatu
  - Year of Independence: 1980
  - Country from which became independence: France/UK
  - Recent Background History:
    - Multiple waves of colonizers migrated to the New Hebrides; the British and French agreed in 1906 to an Anglo-French Condominium, which administered the islands until independence in 1980 when the new name of Vanuatu was adopted.

*Source: CIA Factbook*

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