Economy of the Falkland Islands

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Economy of the Falkland Islands
Currency	1 Falkland pound = 100 pence; note - the Falkland pound is at par with the Pound Sterling
Fiscal year	1 April–31 March
Trade organisations	N/A
Statistics [1]
GDP ranking	224 [2]
GDP	$75,000,000 (2002 est.)
GDP growth	N/A
GDP per capita	purchasing power parity - $25,000 (2002 est.)
GDP by sector	agriculture (NA%), Industry (NA%), Services (NA%)
Inflation	3.6% (1998)
Pop below poverty line	N/A
Labour force	1,100 (est.)
Labour force by occupation	agriculture 95% (mostly sheepherding and fishing)
Unemployment	full employment; labour shortage
Main industries	fish and wool processing; tourism
Exports	wool, hides, meat, squid $125 million (2004 est.)
Main partners	Spain 77.4%, UK 9.4%, US 4.9% (2004)
Trading Partners [3]
Imports	fuel, food and drink, building materials, clothing; $90 million (2004 est.)
Main Partners	UK 63.2%, Spain 30.3%, France 3.6% (2004)
Public finances [4]
Public debt	N/A
Revenues	$66.1 million
Expenses	$66.8 million (FY97/98 est.)
Economic aid	$0 (1997 est.)
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The economy of the Falkland Islands has successfully diversified from an earlier over-dependence on sheep farming.

1 Historical development
2 Overview from CIA Factbook
3 See also
4 External links

[edit] Historical development

During the 19th century the supply and maintenance depot for ships at Stanley developed into a port serving ships rounding Cape Horn, and trade in cow hides from the wild descendants of cattle introduced by French settlers in the late 18th century. Sheep farming was introduced, taking over from the cattle trade in the 1870s and becoming self-supporting by 1885. The islands also provided a base for whaling and sealing, with factories being built on East Falkland and South Georgia, but these industries ended, leaving the wool trade as the mainstay of the islands' economy.

By the 1980s the economic viability of the islands was in doubt, but in the aftermath of the Falklands War there was a new commitment from the United Kingdom government and in mid-1984 the Falkland Islands Development Corporation was formed. In its annual report at the end of that year it set out to increase employment opportunities by encouraging diversification of, to increase population levels through selective immigration, to aim for long-term self-sufficiency and to improve community facilities. To achieve this, it identified as areas to tackle agricultural improvements, tourism, self-sufficiency in energy, development of the industrial and service sector, fisheries, and land subdivision.

By April 2002, the Guardian reported, the Falklands economy was booming, with income from tourism and the sale of squid fishing licences as well as from indigenous fishing companies with locally registered boats. Fishing boats visit the islands from Spain, Korea, Taiwan and Japan, and obtain supplies and services from the islands. An agreement with Argentina set the terms for exploitation of offshore resources, though hopes of oil production have yet to materialise. An islander told the BBC that "we were the luckiest people that was ever mixed up in a war."

Tourist interest was stirred by the publicity given to the islands, and as well as introducing holiday facilities and guided tours, the islands became a regular port of call for the growing market of cruise ships, giving visitors a glimpse of what the islanders had previously thought of as their humdrum existence, as well as tours to see the scenery and wildlife, particularly penguins, seabirds, seals and sealions, and to visit battlefields. However, diplomatic disputes with Argentina caused slight disruption in 2004, when charter flights from Chile to serve cruise ships were refused permission to fly over Argentina to reach the islands. Large number of 19th century shipwrecks around the islands are an attraction for recreational divers, and trout fishing, golf, horse riding and sailing are also on offer.

[edit] Overview from CIA Factbook

The economy was formerly based on agriculture, mainly sheep farming, but today fishing contributes the bulk of economic activity. In 1987 the government began selling fishing licenses to foreign travelers operating within the Falklands exclusive fishing zone. These license fees total more than $40 million per year, which goes to support the island's health, education, and welfare system. Squid accounts for 75% of the fish taken. Dairy farming supports domestic consumption; crops furnish winter fodder. Exports feature shipments of high-grade wool to the UK and the sale of postage stamps and coins. The islands are now self-financing except for defence. The British Geological Survey announced a 200-mile (370 km) oil exploration zone around the islands in 1993, and early seismic surveys suggest substantial reserves capable of producing 500,000 barrels per day; to date no exploitable site has been identified. An agreement between Argentina and the UK in 1995 seeks to defuse licensing and sovereignty conflicts that would dampen foreign interest in exploiting potential oil reserves. Tourism, especially eco-tourism, is increasing rapidly, with about 30,000 visitors in 2001. Another large source of income is interest paid on money the government has in the bank. The British military presence also provides a sizeable economic boost.

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Industries: fish and wool processing; tourism

Industrial production growth rate: NA%

Electricity - production: 22.23 million kWh (2003)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 20.68 million kWh (2003)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: fodder and vegetable crops; sheep, dairy products

Debt - external: $NA

Economic aid - recipient: $0 (1997 est.)

Exchange rates: Falkland pounds per US dollar - 0.54 (2005), 0.5462 (2004), 0.6125 (2003), 0.6672 (2002), 0.6947 (2001) note: the Falkland pound is at par with the British Pound Sterling