Resources
Cape Verde's low per capita GDP reflects a poor natural resource base, including serious water shortages exacerbated by cycles of long-term drought. During periods of normal rainfall, only 4 of 10 islands (Santiago, Santo Antão, Fogo, and Brava) support significant agricultural production.
About 75% of food must be imported. Cape Verde annually runs a high trade deficit, financed by foreign aid and remittances from emigrants; remittances constitute a supplement to GDP of more than 20%. Economic reforms, launched by the new democratic government in 1991, are aimed at developing the private sector and attracting foreign investment to diversify the economy. Since 1991, the policies the government has pursued include an open welcome to foreign investors and a far-reaching privatization program.
Fish and shellfish are plentiful, and small quantities are exported. Cape Verde has cold storage and freezing facilities as well as fish processing plants in Mindelo, Praia, and on Sal. However, the fishing potential, mostly lobster and tuna, is not fully exploited.
The economy is service-oriented, with commerce, transport, and public services accounting for almost 70% of the GDP. Although nearly 35% of the population lives in rural areas, the share of agriculture in GDP in 2010 was only 9.2% (up from 8.9% in 1995); of the 1998 total, fishing accounts for 1.5%.
The Cape Verdean government established the top priorities for development as the promotion of a market economy and of the private sector; the development of tourism, light manufacturing industries, and fisheries; and the development of transport, communications, and energy facilities. In 1994-95 Cape Verde received a total of about U.S.$50 million in foreign investments, of which 50% was in industry, 19% in tourism, and 31% in fisheries and services. Prospects for 2000 depend heavily on the maintenance of aid flows, remittances, and the momentum of the government's development program.
Read more about this topic: Economy Of Cape Verde
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