mic and chronic law and order and land
tenure issues. Australia will supply more than $300 million in aid
in FY07/08, which accounts for nearly 20% of the national budget.

Paracel Islands
China announced plans in 1997 to open the islands
for tourism.

Paraguay
Landlocked Paraguay has a market economy marked by a large
informal sector. This sector features both reexport of imported
consumer goods to neighboring countries, as well as the activities
of thousands of microenterprises and urban street vendors. Because
of the importance of the informal sector, accurate economic measures
are difficult to obtain. A large percentage of the population,
especially in rural areas, derives its living from agricultural
activity, often on a subsistence basis. On a per capita basis, real
income has stagnated at 1980 levels. Most observers attribute
Paraguay's poor economic performance to political uncertainty,
corruption, limited progress on structural reform, and deficient
infrastructure. The economy rebounded between 2003 and 2007, posting
modest growth each year, as growing world demand for commodities
combined with high prices and favorable weather to support
Paraguay's commodity-based export expansion.

Peru
Peru's economy reflects its varied geography - an arid coastal
region, the Andes further inland, and tropical lands bordering
Colombia and Brazil. Abundant mineral resources are found in the
mountainous areas, and Peru's coastal waters provide excellent
fishing grounds. However, overdependence on minerals and metals
subjects the economy to fluctuations in world prices, and a lack of
infrastructure deters trade and investment. After several years of
inconsistent economic performance, the Peruvian economy grew by more
than 4% per year during the period 2002-06, with a stable exchange
rate and low inflation. Growth jumped to 7.5% in 2007, driven by
higher world prices for minerals and metals. Risk premiums on
Peruvian bonds on secondary markets reached historically low levels
in late 2004, reflecting investor optimism regarding the
government's prudent fiscal policies and openness to trade and
investment. Despite the strong macroeconomic performance,
underemployment and poverty have stayed persistently high. Growth
prospects depend on exports of minerals, textiles, and agricultural
products, and by expectations for the Camisea natural gas
megaproje