The Ukrainian economy grew by roughly 12.1 percent in 2004, but preliminary data indicate a slowdown in growth to 2.4 percent in 2005. Following an eight-year post-Soviet recession, 2005 marked the countrys sixth consecutive year of economic growth. Economic expansion has been fueled primarily by growing industrial and agricultural output— exported both eastwards to Russia and westwards to Europe. Ukraines geographic position, linking East and West, while also holding critical warm water ports on the Black Sea, has made the country a trade link of growing importance between the former Soviet Union and Europe.
With the recent additions of some of Ukraines neighboring countries into the EU, the countrys economic role has grown. Following a similar designation by the EU in December 2005, the United States granted Ukraine “market status” in February 2006. The is the first symbolic step toward greater integration with the EU, and market economy status will help Ukraine defend itself from accusations of illegal dumping products cheaply in the EU market that have led to costly punitive damages.

Shortly after the assassination of Prime Minister Rafik Hariri in February 2005, and the subsequent withdrawal of Syrian military forces from the country, Lebanon held elections for a new national parliament in June 2005. The process of forming a new governing coalition is not yet completed, but parties opposed to continued Syrian influence in Lebanon appear to have gained a majority of seats in the Lebanese parliament. Lebanons economy is experiencing reasonably strong growth, with real GDP growth projected at only 3.9 percent for 2005, after posting growth of 4.5 percent in 2004. The main economic problems faced by the new government are the countrys large external debt and budget deficit. External debt is now approximately 170 percent of GDP.

Syria has continued its pattern of economic growth only slightly higher than its population growth in recent years, despite some limited attempts to reform its economy. High prices for its modest quantities of oil exports have offset problems in other sectors of the countrys economy in the short-term. Real GDP growth in 2004 was 3.4 percent, and growth is projected at 3.7 percent in 2005. The U.S. imposed additional economic sanctions against Syria in May 2004, under the provisions of the Syria Accountability Act, though the economic effects have been modest, due to the small volume of U.S. trade and investment with Syria. U.S. energy companies operating in Syria were not forced to divest their investments in Syria. Syria ended its long military occupation of Lebanon in April 2005, under pressure from the international community to implement United Nations Security Council Resolution 1559.

Jordan also has seen strong economic growth over the last year, after a modest slowdown in 2003 due to the disruption of trade as a result of the war in Iraq. Real GDP growth was 7.5 percent in 2004, and is forecast at 6.1 percent for 2005. The one major problem Jordan faces in the near-term, though, is the loss of subsidized oil supplies from Iraq. Kuwait and Saudi Arabia had provided discounted oil as a stopgap measure through 2004, but Jordan now has to purchase oil at world market prices, which has been a drain on the countrys current account balance. Strong growth in exports, however, as well as increased remittances from Jordanian workers in the Persian Gulf region, have offset this effect.

Israel has a highly developed economy and democratic system of government. After experiencing two years of recession in 2001 and 2002 after the renewed Israeli-Palestinian violence which began in 2000, and a year of very slow growth in 2003, Israels economy is beginning to make a more robust recovery. Growth in real gross domestic product (GDP) in 2004 was 4.3 percent, and is forecast at 3.9 percent for 2005. Strong growth in exports of technology products, as well as a revival in the tourism sector, have contributed to the recovery over the last year.

Tunisia is increasingly turning to natural gas to meet domestic energy demand. The state-owned natural gas and electricity company, Societe Tunisienne de lElectricitÉ et du Gaz (STEG) has promoted the use of natural gas through an incentive system that began in 2005. According to STEG, natural gas represented 44 percent of the total initial energy consumption in Tunisia in 2005, compared to just 14 percent in 2003. OGJ estimates that in January 2006, Tunisia had 2.75 trillion cubic feet (Tcf) of proven natural gas reserves. Around two-thirds of the reserves are located offshore. In 2003, Tunisia produced 76 billion cubic feet (Bcf) of natural gas, while consuming 136 Bcf of natural gas during that same year.

Tunisia is a North-African country that gained its independence from France in 1956. In 2004, Tunisia re-elected President Zine al-Abedine Ben Ali to his fourth, five-year term. The Tunisian parliament made the fourth term possible after passing a new constitution in April 2002. In addition to economic reforms, President Ben Ali has pursued a process of democratization, legalized political opposition parties and guaranteed them 20 percent of parliamentary seats. Critics note, however, that substantial progress can still be made in areas including freedom of press, human rights, and separation of powers.
In 2005, Tunisia experienced slightly slower real gross domestic product (GDP) growth (4.0 percent), than the previous four years (2000-2004), which averaged 4.6 percent growth. Industry analysts attribute the slower growth to a slowdown in the agriculture and fishing industries during 2005. However, industry analysts are expecting a revival of the tourism industry to bolster GDP growth in 2006, increasing it to 5.8 percent.
Tunisia has traditionally maintained high tariffs to protect domestic industries. The International Monetary Fund (IMF) has urged that these tariffs be reduced as part of Tunisias "second-generation reforms." Many tariffs were lowered with regards to Europe as part of Tunisias 1995 association agreement with European Union, which came into force in 1998. In addition to integrating its economy with that of Europe, Tunisia has pursued closer relations with its North African neighbors. In May 2001, Egypt, Jordan, Morocco and Tunisia agreed to set up a free trade zone ahead of the 2010 target for trade barriers to end in the Euro-Mediterranean area. The Great Arab Free Trade Zone is expected to eventually encompass 10 Arab nations.
Privatization of Tunisias state-owned enterprises (SOEs) is moving ahead slowly. Since 1987, around 160 SOEs have been at least partially privatized. In the long run, Tunisia sees privatization as a way of creating jobs by making its economic climate more attractive to investors. Tunisias unemployment rate remains at high levels (officially 14 percent, but likely higher). As close to 55 percent of the work force is under the age of 25, significant job creation is needed.

According to January 2006 estimates by the Oil and Gas Journal (OGJ), Morocco has proven oil reserves of 1.07 million barrels and natural gas reserves of 60 billion cubic feet (Bcf). Morocco may have additional hydrocarbon reserves, as many of the countrys sedimentary basins have not yet been explored.
The Moroccan Office of Hydrocarbons and Mining (ONHYM) has become optimistic about finding additional reserves - particularly offshore - following discoveries in neighboring Mauritania. At the end of 2005, 19 foreign companies were operating in Morocco, with an estimated total investment of $56 million per year. In May 2004, China Offshore Oil Corporation (CNOOC) received a license to drill near Agadir. In April 2004, Norways Norsk Hydro signed a 12-month exploration contract for the Safi Offshore Northwest zone, while Denmarks Maersk signed an eight-year agreement for eight blocks near Tarfaya. In March 2004, Calgary-based Stratic Energy committed to a three-year exploration program in two onshore blocks in northwest Morocco. The two concessions cover approximately 1,544 square miles. Other foreign firms engaged in exploration include Petronas, Cooper Energy NL, Shell, Total, and Tullow Oil.
Morocco produces small volumes of oil and natural gas from the Essaouira Basin and small amounts of natural gas from the Gharb Basin. Consequently, Morocco is the largest energy importer in northern Africa. The countrys total yearly costs for energy imports range from $1- $1.5 billion. However, high oil prices in 2005 increased import costs to approximately $2 billion for the year. In 2003, the Moroccan government announced that foreign companies could import oil without paying import tariffs. This followed a 2000 decision, in which, Morocco modified its hydrocarbons law in order to offer a 10-year tax break to offshore oil production firms, and to reduce the governments stake in future oil concessions to a maximum of 25 percent. The entire energy sector is due to be liberalized by 2007.

Morocco, located in Northwest Africa, gained its independence from France in 1956. Morocco is a constitutional monarchy, in which, King Mohammed VI possesses more authority than either the judiciary or the legislature. Since King Mohammed VI ascended the throne in July 1999, he has actively pursued various economic reforms including the privatization of state-run businesses.
In 2005, Morocco experienced real GDP growth of 2.0 percent, a decrease from the 3.7 percent GDP growth achieved in 2004. Key factors that instigated the slowdown in GDP growth included Moroccos worst drought in 60 years, which cut agricultural output in the county by nearly 50 percent. In addition, the expiry of the Multi-Fiber Agreement in 2005 allowed for Chinese products to flood Moroccos major European textile export market, which caused a 16 percent drop in Moroccan exports to the trade area. Finally, high oil prices negatively affected the Moroccan economy as the countrys energy import bill increased. However, 2006 forecast GDP growth is expected to increase to 4.6 percent due to the Moroccan governments firm commitment to enforce economic reforms, which include working to decrease the countrys economic dependency on the volatile agricultural sector. Also, China made a voluntary decision to restrict its imports to the European Union until 2007.
Both the International Monetary Fund (IMF) and the World Bank have provided valuable funding to Morocco as the county continues to seek economic liberalization. In June 2005, the World Bank endorsed a $150-million loan to Morocco that the government will use to provide housing for the urban poor. The World Bank also approved a $200-million loan in December 2005 that the government will use to make several financial reforms. In the IMFs Article VI report (released in 2005) on Morocco, the IMF noted the need for Morocco to expand output of the non-agricultural sector, but praised the countrys ability to maintain stable prices, a stable current account and stable foreign reserves. In addition, Morocco made a commitment to improve the quality and transparency of its economic statistics by joining the IMFs Special Data Dissemination Standards (SDDS).

Mauritania, located on the northwest coast of Africa, gained its independence from France in 1960. In August 2005, a bloodless coup ousted President Taya, who had come to power in a coup in 1984, and installed a military council led by Colonel Ely Ould Mohamed Fal. The military council has stated its intention of remaining in power for up to two years while it works to create a democratic institution and hold organized elections. Under former President Taya, the Mauritanian government worked to reduce poverty, improve the health and education systems and promote privatization of government-owned businesses.
Historically, Mauritania has experienced economic growth from the iron ore and fishing industries. However, in February 2006, Mauritania began producing oil for the first time, and oil stand to bolster future economic growth in the country. Mauritanias real gross domestic product (GDP) grew an estimated 5.4 percent in 2005 and is projected to grow by 26.0 percent in 2006. Currently, Mauritania is the poorest country in the Arab Maghreb Union (AMU) which includes the countries Morocco, Tunisia, Algeria and Libya. Mauritanias per capita income is only $443, with almost 30 percent of the population living on less than $1 a day, and 69 percent living on less than $2 a day. Despite government reforms set in place since 1992, Mauritania still experiences occasional periods of high inflation. In the second half of 2004, prices rose because of food shortages, bringing the inflation rate for the year to 10.1 percent. In 2005, due in part to high oil prices, inflation remained high at 14.0 percent. An 8.0 percent inflation rate is forecast for 2006.
In 2002, Mauritania completed the World Bank/International Monetary Fund (IMF) heavily indebted poor countries (HIPC) initiative. This led to debt relief of $1.1 billion, which almost halved Mauritanias net debt burden. Despite its improving economic environment, Mauritania remains vulnerable to several sources of instability. With an economy strongly reliant upon primary products (mining, fishing, and agriculture), fluctuations in international markets, as well as external shocks like weather, can have a profound impact on Mauritania. In 2006, the U.S. government removed Mauritania from eligibility for the African Growth and Opportunity Act (AGOA), due to not meeting requirements set forth under the act. To maintain eligibility status for the AGOA, African countries are required to have established, or be working towards the establishment of various reforms set forth under section 506A(a)(1) of the AGOA, which include market-based economies, the rule of law and political pluralism, protection of human rights and worker rights and policies to reduce poverty.