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Faroe Islands


    • Overview:
      The Faroese, who have long enjoyed the affluent living standards of the Danes and other Scandinavians, now must cope with the decline of the all-important fishing industry and one of the world's heaviest per capita external debts of about $25,000. When the nations of the world extended their fishing zones to 200 nautical miles in the early 1970s, the Faroese no longer could continue their traditional long-distance fishing and subsequently depleted their own nearby fishing areas. The government's tight controls on fish stocks and its austerity measures have caused a recession, and subsidy cuts will force nationalization in the fishing industry, which has already been plagued with bankruptcies. Copenhagen has threatened to withhold its annual subsidy of $130 million - roughly one-third of the islands' budget revenues - unless the Faroese make significant efforts to balance their budget. To this extent the Faroe government is expected to continue its tough policies, including introducing a 20% value-added tax (VAT) in 1993, and has agreed to an IMF economic-political stabilization plan. In addition to its annual subsidy, the Danish government has bailed out the second largest Faroe bank to the tune of $140 million since October 1992.

    • National product:
      GDP - purchasing power parity - $662 million (1989 est.)

    • National product real growth rate:
      -10.8% (1993 est.)

    • National product per capita:
      $14,000 (1989 est.)

    • Inflation rate (consumer prices):
      6.8% (1993 est.)

    • Unemployment rate:
      23% (1993)

    • Budget:

        revenues:
        $407.2 million

        expenditures:
        $482.7 million, including capital expenditures of $NA (1993 est.)

    • Exports:
      $345.3 million (f.o.b., 1993 est.)

        commodities:
        fish and fish products 88%, animal feedstuffs, transport equipment (ships) (1989)

        partners:
        Denmark 20%, Germany 18.3%, UK 14.2%, France 11.2%, Spain 7.9%, US 4.5%

    • Imports:
      $234.4 million (c.i.f., 1993 est.)

        commodities:
        machinery and transport equipment 24.4%, manufactures 24%, food and livestock 19%, fuels 12%, chemicals 6.5%

        partners:
        Denmark 43.8%, Norway 19.8%, Sweden 4.9%, Germany 4.2%, US 1.3%

    • External debt:
      $1.2 billion (1993 est.)

    • Industrial production:
      growth rate NA%

    • Electricity:

        capacity:
        90,000 kW

        production:
        200 million kWh

        consumption per capita:
        3,953 kWh (1992)

    • Industries:
      fishing, shipbuilding, handicrafts

    • Agriculture:
      accounts for 27% of GDP; principal crops - potatoes and vegetables; livestock - sheep; annual fish catch about 360,000 metric tons

    • Economic aid:

        recipient:
        receives an annual subsidy from Denmark of about $130 million

    • Currency:
      1 Danish krone (DKr) = 100 oere

    • Exchange rates:
      Danish kroner (DKr) per US$1 - 6.034 (January 1995), 6.361 (1994), 6.484 (1993), 6.036 (1992), 6.396 (1991), 6.189 (1990)

    • Fiscal year:
      1 April - 31 March






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