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International Monetary Fund

International Monetary Fund

: IMF redirects here. For other meanings of IMF see IMF (disambiguation) IMF (disambiguation) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring exchange rates and balance of payments, as well as offering technical and financial assistance when asked.

Organization and purpose

The IMF describes itself as: "an organization of 184 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty". With the exception of North Korea, Cuba, Liechtenstein, Andorra, Monaco, Tuvalu and Nauru, all UN member states either participate directly in the IMF or are represented by other member states. During the 1930s, as economic activity in the major industrial countries dwindled, countries attempted to defend their economies by increasing restrictions on imports. To conserve dwindling reserves of gold and foreign exchange, some countries curtailed foreign imports, some devalued their currencies, and some introduced complicated restrictions on foreign exchange accounts held by their citizens. These measures were arguably ineffective since they diminished Ricardian comparative advantage. World trade declined sharply, as did employment and living standards in many countries. As World War II came to a close, the leading allied countries considered various plans to restore order to international monetary relations, and at the Bretton Woods conference the IMF emerged. The founding members drafted a charter (or Articles of Agreement) of an international institution to oversee the international monetary system and to promote both the elimination of exchange restrictions relating to trade in goods and services, and the stability of exchange rates. The IMF came into existence in December 1945, when the first 29 countries signed its Articles of Agreement. The statutory purposes of the IMF today are the same as when they were formulated in 1944 (see Box 2). From the end of World War II until the late-1970s, the capitalist world experienced unprecedented growth in real incomes. (Since then, China's integration into the capitalist system has added substantially to the growth of the system.) Within the capitalist system, the benefits of growth have not flowed equally to all (either within or among nations) but most capitalist countries have seen recent increases in prosperity that contrast starkly with the conditions within capitalist countries during the interwar period. The lack of a recuring global depression is likely due to improvements in the conduct of international economic policies that have encouraged the growth of international trade and helped smooth the economic cycle of boom and bust. In the decades since World War II, apart from rising prosperity, the world economy and monetary system have undergone other major changes that have increased the importance and relevance of the purposes served by the IMF, but that have also required the IMF to adapt and reform. Rapid advances in technology and communications have contributed to the increasing international integration of markets and to closer linkages among national economies. As a result, financial crises, when they erupt, now tend to spread more rapidly among countries. The IMF's influence in the global economy steadily increased as it accumulated more members. The number of IMF member countries has more than quadrupled from the 44 states involved in its establishment, reflecting in particular the attainment of political independence by many developing countries and more recently the collapse of the Soviet bloc. The expansion of the IMF's membership, together with the changes in the world economy, have required the IMF to adapt in a variety of ways to continue serving its purposes effectively.

History

Agreement for the creation of the International Monetary Fund came at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire, United States, on July 22, 1944. The principal architects of the IMF at the conference were British economist John Maynard Keynes and the chief international economist at the US Treasury Department, Harry Dexter White. The Articles of Agreement came into force on December 27, 1945, the organization came into existence on May 1, 1946, as part of a post-WWII reconstruction plan, and it began financial operations on March 1, 1947. It is sometimes referred to as "a Bretton Woods institution", along with the International Bank for Reconstruction and Development (now part of the larger World Bank Group).

Membership qualifications

A country may apply for membership of the IMF. The application will be considered, first, by the IMF's Executive Board. After its consideration, the Executive Board will submit a report to the Board of Governors of the IMF with recommendations in the form of a "Membership Resolution." These recommendations cover the amount of quota in the IMF, the form of payment of the [http://www.imf.org/external/pubs/ft/aa/aa03.htm#1 subscription], and other customary terms and conditions of membership. After the Board of Governors has adopted the "Membership Resolution," the applicant state needs to take the legal steps required under its own law to enable it to sign the IMF's Articles of Agreement and to fulfill the obligations of IMF membership. A member's quota in the IMF determines the amount of its subscription, its voting weight, its access to IMF financing, and its allocation of SDRs.

Assistance and reforms

Part of its mission has become to provide assistance to countries that experience serious economic difficulties. Member states with balance of payments problems may request loans and/or organizational management of their national economies. In return, the countries are obliged to launch certain reforms, an example of which is the "Washington Consensus".

Criticism

The role of the two Bretton Woods institutions has been controversial to many since the late Cold War period. Critics claim that IMF policy makers deliberately supported capitalist military dictatorships friendly to American and European corporations. Critics also claim that the IMF is generally apathetic or hostile to their views of democracy, human rights, and labor rights. These criticisms generated a controversy that helped spark the anti-globalization movement. Others claim the IMF has little power to democratize sovereign states, nor is that its stated objective: to advise and promote financial stability. Arguments in favor of the IMF say that economic stability is a precursor to democracy. Two criticisms from economists have been that financial aid is always bound to so-called "Conditionalities", including Structural Adjustment Programs. Conditionalities, it is claimed, retard social stability and hence inhibit the stated goals of the IMF. Typically the IMF and its supporters advocate a Keynesian approach. As such, adherents of supply-side economics generally find themselves in open disagreement with the IMF. The IMF frequently advocates currency devaluation, criticized by proponents of supply-side economics as inflationary. Secondly they link higher taxes under "austerity programmes" with economic contraction. Currency devaluation is recommended by the IMF to the governments of poor nations with struggling economies. Supply-side economists claim these Keynesian IMF policies are destructive to economic prosperity, although many other economists disagree. Complaints are also directed toward International Monetary Fund gold reserve being undervalued. At its inception in 1945, the IMF pegged gold at 35 dollars per Troy ounce of gold. In 1973 the Nixon administration lifted the fixed asset value of gold in favour of a world market price. Hence the fixed exchange rates of currencies tied to gold were switched to a floating rate, also based on market price and exchange. This largely came about because Petrodollars outside the United States were more than could be backed by the gold at Fort Knox under the fixed exchange rate system. The fixed rate system only served to limit the amount of assistance the organization could use to help debt-ridden countries. That said, the IMF sometimes advocates "austerity programmes," increasing taxes even when the economy is weak, in order to generate government revenue and balance budget deficits, which is the opposite of Keynesian policy. These policies were criticised by Joseph E. Stiglitz, former chief economist at the World Bank, in his book Globalization and Its Discontents. He argued that by converting to a more Monetarist aproach, the fund no longer had a valid purpose, as it was designed to provide funds for countries to carry out Keynesian reflations. Most altermondialists, like ATTAC, believe that IMF interventions aggravate the poverty and debt of Third World and developing countries. According to the analysis by Yves Engler, the IMF is considered to be responsible for worsening or actually creating famine in Malawi (2002), Ethiopia (2003) and Niger (2005). [http://www.zmag.org/content/showarticle.cfm?SectionID=2&ItemID=8494] Opposition to the IMF is often fragmented. For instance, advocates of supply-side economics would generally regard the policies advocated by ATTAC to be little different in form to the ideas peddled by the IMF. In other words, they would see ATTAC tax-and-spend policies and the IMF's austerity policies as being fundamentally similar. Argentina, which had been considered by the IMF to be a model country in its compliance to policy proposals by the Bretton Woods institutions, experienced a catastrophic economic crisis in 2001, generally believed to have been caused by IMF-induced budget restrictions — which undercut the government's ability to sustain national infrastructure even in crucial areas such as health, education, and security — and privatization of strategically vital national resources. The crisis added to widespread hatred of this institution in Argentina and other South American countries, with many blaming the IMF for the region's economic problems [http://www.serendipity.li/hr/imf_and_dollar_system.htm]. The current — as of 2005 — trend towards moderate left-wing governments in the region and a growing concern with the development of a regional economic policy largely independent of big business pressures has been ascribed to this crisis. Another example of where IMF Structural Adjustment Programmes aggravated the problem was in Kenya. Before IMF got involved in the country, the Kenya central bank oversaw all currency movement in and out of the country. IMF mandated that Kenya central bank had to allow easier currency movement. However, the adjustment resulted in very little foreign investment, but allowed Kamlesh Manusuklal Damji Pattni, with the help of corrupt government officials, to syphon out billions of Kenya shillings in what came to be known as the Goldenberg scandal, leaving the country in a state worse than that which it was in before the IMF reforms were implemented. That the IMF intervenes only in countries that experience years of dire economic conditions has certainly hurt its reputation. The financial collapses it intervenes in are products of uneven capitalist development sometimes exacerbated by government mismanagement, but mismanagement is often cited by rich nations as the source of the financial crises. These collapses tend to lead to years of economic difficulty that can be addressed in various ways, but IMF Stuctural Adjustment Policies consistently serve to open up or "liberalize" economies to foreign capital rather than provide for economic recovery through statist policies such as government financed projects to achieve full employment. Thus, IMF policies further the notion that economic development in underdeveloped countries is dependent on attracting foreign investment rather than through a state-managed approach centered on full employment and progressive taxation. It is also true that politicians have used the IMF as an easy target for blame when they themselves have erred, using nationalism to gain easy political points. Overall the IMF success record is limited. While it was created to help stabilize the global economy, since 1980 over 100 countries have experienced a banking collapse that reduced GDP by four percent or more -- far more than at any previous time in history. The considerable delay in IMF response to a crisis, and the fact that it tends to only respond to rather than prevent them, has led many economists to argue for reform. Whatever the feelings people in the Western world have for the IMF, research by the Pew Research Center shows that more than 60 percent of Asians and 70 percent of Africans feel that the IMF and the World Bank have a positive effect on their country [http://people-press.org/reports/pdf/185topline.pdf]. Such research has made proponents of IMF claim the IMF-critique misleading, as it would be difficult to speak of suffering if the sufferers don't feel hurt. The documentary Life and Debt deals with the IMF's policies' influence on Jamaica and its economy, from a critical point of view. .

Past managing directors

An unwritten rule establishes that the IMF's managing director must be European and that the president of the World Bank must be from the United States. Executive Directors, who confirm the managing director are voted in by Finance Ministers from countries they represent. The IMF is for the most part controlled by the major Western Powers, with voting rights on the Executive board based on a quota derived from a monetary stake in the institution. Rarely does the board vote and pass issues contradicting the will of the US or Europeans. There have been some exceptions in the past. Dr. Mohamed Finaish from Libya, the Executive Director representing the majority of the Arab World and Pakistan, was a tireless defender of the developing nations' rights at the IMF. He stood steadfast in his beliefs and principles for fourteen years until his defeat in the 1992 elections to an Egyptian IMF Staff Member.

Dates	Name	Country
May 6, 1946 - May 5, 1951	Camille Gutt	Belgium
August 3, 1951 - October 3, 1956	Ivar Rooth	Sweden
November 21, 1956 - May 5, 1963	Per Jacobsson	Sweden
September 1, 1963 - August 31, 1973	Pierre-Paul Schweitzer	France
September 1, 1973 - June 16, 1978	Johannes Witteveen	Netherlands
June 17, 1978 - January 15, 1987	Jacques de Larosière	France
January 16, 1987 - February 14, 2000	Michel Camdessus	France
May 1, 2000 - March 4, 2004	Horst Köhler	Germany
March 5, 2004 - June 6, 2004	Anne Krueger	United States - (acting)
June 7, 2004 - present	Rodrigo de Rato	Spain

Footnotes

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External links

- [http://www.imf.org International Monetary Fund website]
- [http://www.imf.org/external/pubs/ft/fandd/index.htm Finance & Development - A quarterly magazine of the IMF]
- [http://www.imf.org/external/pubs/ft/ar/ Annual Reports of the Executive Board]
- [http://www.imf.org/external/pubs/ft/weo/weorepts.htm World Economic Outlook Reports]
- [http://www.imf.org/external/pubind.htm IMF Publications]
- [http://www.economist.com/opinion/displayStory.cfm?story_id=2941379 Kenneth Rogoff - The sisters at 60]
- How the IMF Props Up the Dollar System [http://www.serendipity.li/hr/imf_and_dollar_system.htm]
- [http://web.gc.cuny.edu/eusc/activities/paper/schwartz.htm IMF’s Origins as a Blueprint for Its Future, Anna J. Schwartz, National Bureau of Economic Research]

References

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- Dreher, Axel (2004), A Public Choice Perspective of IMF and World Bank Lending and Conditionality, Public Choice 119, 3-4: 445-464.
- Dreher, Axel (2004), The Influence of IMF Programs on the Re-election of Debtor Governments, Economics & Politics 16, 1: 53-75
- Dreher, Axel (2003), The Influence of Elections on IMF Programme Interruptions, The Journal of Development Studies 39,6: 101-120.
- The Best Democracy Money Can Buy by Greg Palast (2002)
- The IMF and The World Bank: How do they differ?[http://www.imf.org/external/pubs/ft/exrp/differ/differ.htm] by David D. Driscoll Category:International organizations Category:International economics Category:International Monetary Fund ko:국제통화기금 ja:国際通貨基金

IMF (disambiguation)

IMF, abbreviation:
- International Metalworkers' Federation, a global union federation
- International Monetary Fund
- International Music Feed, a music video television network.
- Initial Mass Function, in Big Bang theories of astronomy.

Global financial system

The global financial system (GFS) refers to those financial institutions and regulations that act on the international level, as opposed to those that act on a national or regional level. The main players are the global institutions, such as International Monetary Fund and Bank for International Settlements, national agencies and government departments, e.g. central banks and finance ministries, and private institutions acting on the global scale, e.g. banks and hedge funds. Deficiencies and reform of the GFS have been hotly discussed in recent years.

History

The history of financial institutions must be differentiated from economic history and history of money. In Europe, it starts with the first financiers and banks in the 1400–1600s in central and western Europe. The first modern bank was Bank of Barcelona (1401); the first global financiers the Fuggers (1487) in Germany; the first stock company in England (Russia Company 1553); the first foreign exchange market (The Royal Exchange 1566, England); the first stock exchange the Amsterdam Stock Exchange. Milestones in the history of financial institutions are the Gold Standard (1871–1932), the founding of IMF, World Bank at Bretton Woods, and the abolishment of fixed exchange rates in 1973.

Institutions

International institutions

The most prominent international institutions are the IMF, the World Bank and the WTO
- The International Monetary Fund (http://www.imf.org/) keeps account of international balance of payments accounts of member states. The IMF acts as a lender of last resort for members in financial distress, e.g. currency crisis, problems meeting balance of payment when in deficit and debt default. Membership is based on quotas, or the amount of money a country provides to the fund relative to the size of its role in the international trading system.
- The World Bank (http://www.worldbank.org/) aims to provide funding, take up credit risk or offer favorable terms to development projects mostly in developing countries that couldn't be obtained by the private sector.
- The World Trade Organization (http://www.wto.org/) settles trade disputes and negotiates international trade agreements in its rounds of talks (currently the Doha Round)

Government institutions

Governments act in various ways as actors in the GFS: they pass the laws and regulations for financial markets and set the tax burden for private players, e.g. banks, funds and exchanges. They also participate actively through discretionary spending. They are closely tied (though in most countries independent of) to central banks that issue government debt, set interest rates and deposit requirements, and intervene in the foreign exchange market.

Private participants

Players acting in the stock-, bond-, foreign exchange-, derivatives- and commodities-markets and investment banking are
- Commercial banks
- Pension funds
- Hedge funds and Private Equity

Legal frameworks and treatises

- Eurozone
- NAFTA
- Mercosur
- CIS

Major incidents

The most current incidents in the GFS are the Asian financial crisis, the following devaluations in Russia, Brazil and Argentina and the bursting of the Dot-Com bubble

Criticism, discussions and reform

Among the many critics of the GFS are:
- The ATTAC network
- Joseph Stiglitz
- George Soros

Exchange rate

In finance, the exchange rate between two currencies specifies how much one currency is worth in terms of the other. For example an exchange rate of 120 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that JPY 120 is worth the same as USD 1. An exchange rate is also known as a foreign-exchange rate, forex rate or FX rate. The foreign exchange market is one of the largest markets in the world. By some estimates, about USD 2 trillion worth of currency changes hands every day. An exchange rate quotation is given by stating the number of units of a price currency that can be bought in terms of 1 unit currency. For example, in a quotation that says the EUR-USD exchange rate is 1.2 USD per EUR, the price currency is USD and the unit currency is EUR. Quotes using a country's home currency as the price currency are known as direct quotation or price quotation (from that country's perspective) ([http://www.inlandrevenue.gov.uk/manuals/cfmmanual/cfm7011.htm]) and are used by most countries. Quotes using a country's home currency as the unit currency are known as indirect quotation or quantity quotation and are used in British newspapers and are also common in Australia, New Zealand and Canada.
- direct quotation: Home Currency / Foreign Currency
- indirect quotation: Foreign Currency / Home Currency Note that, using direct quotation, if a unit currency is strengthening (i.e. appreciating, or becoming more valuable) then the exchange rate number increases. Conversely if the price currency is strengthening, the exchange rate number decreases and the unit currency is depreciating.

Free or pegged

:Main article: Exchange rate regime If a currency is free-floating, its exchange rate is allowed to vary against that of other currencies. Exchange rates for such currencies are likely to change almost constantly as quoted on financial markets, mainly by banks, around the world. If the value of the currency is "pegged" its value is maintained by the government in question at a fixed rate relative to the other currency. In 1983 the Hong Kong dollar was linked to the United States dollar.

Nominal and real exchange rates

- The nominal exchange rate is the rate at which an organization can trade the currency of one country for the currency of another.
- The real exchange rate is the rate at which an organization can trade goods and services of one country for those of another. For example, say the price of a good increases 10% in the UK, and there is also a 10% appreciation in the Japanese currency against the UK currency, the price of the good remains constant for someone in Japan despite increase in price for people in the UK. In cases where tariffs become an issue, this would be less the case.

Fluctuations in exchange rates

A market based exchange rate will change whenever the values of either of the two component currencies change. A currency will tend to become more valuable whenever demand for it is greater than the available supply. It will become less valuable whenever demand is less than available supply (this does not mean people no longer want money, it just means they prefer holding their wealth in some other form, possibly another currency). Increased demand for a currency is due to either an increased transaction demand for money, or an increased speculative demand for money. The transaction demand for money is highly correlated to the country's level of business activity, gross domestic product (GDP), and employment levels. The more people there are out of work, the less the public as a whole will spend on goods and services. Central banks typically have little difficulty adjusting the available money supply to accommodate changes in the demand for money due to business transactions. The speculative demand for money is much harder for a central bank to accommodate but they try to do this by adjusting interest rates. An investor may choose to buy a currency if the return (that is the interest rate) is high enough. The higher a country's interest rates, the greater the demand for that currency. It has been argued that currency speculation can undermine real economic growth, in particular since large currency speculators may deliberately create downward pressure on a currency in order to force that central bank to sell their currency to keep it stable (once this happens, the speculator can buy the currency back from the bank at a lower price, close out their position, and thereby take a profit). In choosing what type of asset to hold, people are also concerned that the asset will retain its value in the future. Most people will not be interested in a currency if they think it will devalue. A currency will tend to lose value, relative to other currencies, if the country's level of inflation is relatively higher, if the country's level of output is expected to decline, or if a country is troubled by political uncertainty. For example, when Russian President Vladimir Putin dismissed his Government on February 24, 2004, the price of the Ruble dropped. When China announced plans for its first manned space mission, synthetic futures on Chinese yuan jumped (since China's currency is officially pegged, synthetic markets have emerged that can behave as if the yuan was floating). Like the stock exchange, money can be made or lost on the foreign exchange market by investors and speculators buying and selling at the right times. Currencies can be traded at spot and foreign exchange options markets. The spot market represents current exchange rates, whereas options are derivatives of exchange rates.

Foreign exchange markets

:Main article: Foreign exchange market The foreign exchange markets are usually highly liquid as the world's main international banks provide a market around-the-clock. The Bank for International Settlements reported that global foreign exchange market turnover daily averages in April was $650 billion in 1998 (at constant exchange rates) and increased to $1.9 trillion in 2004 ([http://www.bis.org/publ/rpfx05.htm Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity 2004 - Final Results]). The biggest foreign exchange trading centre is London, followed by New York and Tokyo.
See also

- Continuous linked settlement
- Financial instruments
- Gold standard
- List of international trade topics
- Hyperbolic coordinates
- Table of historical exchange rates
- Currency Pair
External links

- [http://finance.yahoo.com/m3 Yahoo currency converter and cross rates]
- [http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/currency/default.stm BBC cross rates]
- [http://rate-exchange.org/forex/forex-table-short.cfm RE Exchange Rates] Category:Macroeconomics Category:International trade category:International economics Category:Currency ko:환율 ja:為替レート

Balance of payments

The balance of payments is a measure of the payments that flow into and out from a particular country from and to other countries. It is determined by a country's exports and imports of goods, services, and financial capital, as well as financial transfers.

Overview

If there is more money flowing into a country than there is flowing out, that country has a positive balance of payments; if, on the other hand, more money flows out than in, the balance of payments is negative. A country's international transactions can be grouped into three categories: :(I) Current Account ::
- Exports ::# Merchandise (tangible goods) ::# Services (invisible trade, eg. legal, consulting, royalties, patents etc.) ::# Factor Income (interest, dividend or any other foreign investment income) ::
- Imports ::# Merchandise ::# Services ::# Factor income ::
- Unilateral Transfers (one way "unrequitted" payments, eg.foreign aid, grants, gifts etc.) :(II) Capital Account ::# Foreign Direct Investment (FDI) ::# Portfolio Investment ::#
- Equity Securities ::#
- Debt Securities ::# Other Investment (transactions in currency, bank deposits, trade credits etc.) ::# Statistical discrepancies :(III) Foreign Reserves ::
- Official Reserve account, includes gold, foreign exchanges, SDRs, reserves in IMF
- current account: records net flow of money into a country resulting from trade in goods and services and transfer payments made from abroad. The current account itself comprises of 3 accounts : trade account, income account and transfers account. A trade deficit(surplus) arises when there is a deficit(surplus) in the Merchandise trade within the current account
- capital account: records net flow of money from purchases and sales of assets such as stocks, bonds and land. Money coming in (+), or leaving (−):
- + Exports
- − Imports
- − Increase of owned assets abroad
- + Increase of foreign-owned assets in the country An account may show a surplus or a deficit. For example, a trade surplus implies that a country's exports are higher than its imports and hence there is a net flow of money into the country. A trade deficit, on the other hand, implies that the country's imports exceed its exports and hence there is a net flow of money out of the country. For a country to have a zero balance of payments, a current account deficit must be balanced by a capital account surplus. The US have been running a negative current account for a long while, which is financed through a positive financial account. The only way to buy more than you sell is to borrow money. A country will have a negative balance of payments (i.e., there is to be a net flow of money out of the country) if the net of the current account and the capital account is a deficit. Similarly, there will be a positive balance of payments (i.e., a net flow of money into a country) if the net of the current and the capital account results in a surplus.

History

Historically these flows simply were not carefully measured, and the flow proceeded in many commodities and currencies without restriction, clearing being a matter of judgement by individual banks and the governments that licensed them to operate. Mercantilism was a theory that took special notice of the balance in payments and sought simply to monopolize gold, in part to keep it out of the hands of potential military opponents (a large "war chest" being a prerequisite to start a war, whereupon much trade would be embargoed). As mercantilism gave way to classical economics, these crude systems were later regulated in the 19th century by the gold standard which linked central banks by a convention to redeem "hard currency" in gold. After World War II this system was replaced by the Bretton Woods institutions (the International Monetary Fund and Bank for International Settlements) which pegged currency of participating nations to the US dollar, which was redeemable nominally in gold. In the 1970s this redemption ceased, leaving the system without a formal base. Some consider the system today to be based on oil, a universally desirable commodity due to the dependence of so much infrastructural capital on oil supply. Since OPEC prices oil in US dollars, the US dollar remains a reserve currency, but is increasingly challenged by the euro, and to some degree the Japanese yen.

United States balance

External links

Data

- [http://dsbb.imf.org/Applications/web/sddsnsdppage/ IMF DSBB]
- [http://www.fedstats.gov/imf/ United States DSBB] (See "External Sector")
- [http://www.bea.gov/bea/international/bp_web/simple.cfm?anon=71&table_id=1&area_id=3 BEA U.S. International Transactions Accounts Data] You can also download historical balance of payments information from 1960 under the "All Tables" link of the following page:
- [http://www.bea.gov/bea/international/bp_web/list.cfm?anon=71®istered=0 BEA Balance of Payments Section] Category:Economic indicators Category:Macroeconomics

North Korea

North Korea, officially the Democratic People's Republic of Korea (Korean: Chosŏn Minjujuŭi Inmin Konghwaguk; Hangul: 조선민주주의인민공화국), is a country in East Asia, covering the northern half of the Korean Peninsula. Locally, it is more commonly called Pukchosŏn (북조선, "North Chosŏn"). (See Names of Korea.) North Korea is bordered by three countries. To the south along the DMZ, it borders South Korea, with which it had formed a single nation until 1948. Its northern border is predominantly with the People's Republic of China. Russia shares a 19 km border along the Tumen River in the far northeast corner of the country.

History

Japanese rule of Korea ended after World War II in 1945. Korea was occupied by the Soviet Union north of the 38th Parallel and by the United States south of the 38th parallel, but the United States and the Soviet Union were unable to agree on implementation of Joint Trusteeship over Korea. This led in 1948 to the establishment of separate governments in the north and south, each claiming to be the legitimate government over all of Korea. Growing tensions between the governments in the north and south eventually led to the Korean War, when on June 25 1950 the (North) Korean People's Army crossed the 38th Parallel and attacked. The war continued until July 27 1953, when the United Nations Command and Korean People's Army and the Chinese People's Volunteers signed the Korean War Armistice Agreement. The demilitarized zone, or DMZ separated the two countries. North Korea was governed from 1948 by Kim Il Sung until his death on July 8, 1994. After his death, his son Kim Jong Il was named General Secretary of the Korean Workers' Party on October 8, 1997. In 1998, the legislature reconfirmed him as Chairman of the National Defence Commission and declared that position as the "highest office of state." International relations generally improved, and there was a historic North-South summit in June 2000. However, tensions with the United States recently increased when North Korea resumed its nuclear weapons program. During Kim Jong Il's rule in the mid to late 1990s, the country's economy declined significantly, and food shortages developed in many areas. According to aid groups, millions of people in rural areas starved to death due to famine, exacerbated by a collapse in the food distribution system [http://web.amnesty.org/library/index/engasa240032004]. Large numbers of North Koreans illegally entered the People's Republic of China in search of food. Hwang Jang Yop, International Secretary of the Korean Workers' Party, defected to South Korea in 1997. See also: History of Korea, Division of Korea

Politics

North Korea's government is dominated by the Korean Workers' Party (KWP), to which 80 percent of government officials belong. The KWP follows and upholds the ideology of Juche (self-reliance), which originally grew out of Stalinism. Like the former Soviet Union, North Korea is dominated by a party bureaucracy that claims to represent the will of the people. The KWP replaced mentions of Marxism-Leninism in the North Korean constitution with Juche in 1977. Communist critics of the KWP deny that it is a communist state. Minor political parties exist, but they are subordinated to the KWP and do not oppose its rule. In practice the exact power structure of the country is somewhat unclear, although it is commonly accepted that the nation's regime is a totalitarian dictatorship. Nominally, the Premier is the head of government, but real power lies with Kim Jong Il (the son of the deceased Kim Il Sung), head of the KWP and the military. Kim holds several official titles, the most important being General Secretary of the Workers' Party of Korea, Chairman of the National Defense Commission and Supreme Commander of the Korean People's Army. Within the country he is commonly known by the affectionate title of "Dear Leader". Similarly, his father, Kim Il Sung, held the title of "Great Leader." North Korea's 1972 constitution was amended in late 1992 and again in 1998. The 1998 constitution states that the late Kim Il Sung is "Eternal President of the Republic," and the post of president was abolished after his death. The Constitution gives much of the functions normally accorded to a head of state to the Supreme People's Assembly Presidium, whose president "represents the State" and receives credentials from foreign ambassadors. The government of the republic is led by the Prime Minister and, in theory, a super cabinet called the Central People's Committee (CPC), the government's top policymaking body. The CPC is headed by the President, who also nominates the other committee members. The CPC makes policy decisions and supervises the Cabinet, or State Administration Council (SAC). SAC is headed by a Premier and is the dominant administrative and executive agency. The parliament, the Supreme People's Assembly (Choego Inmin Hoeui), is the highest organ of state power. Its 687 members are elected every five years by popular vote. Usually it holds only two annual meetings, each lasting a few days, but it mostly ratifies decisions made by the ruling KWP (see rubberstamp (politics)). A standing committee elected by the Assembly performs legislative functions when the Assembly is not in session. See also: Foreign relations of North Korea, Military of North Korea, North Korea and weapons of mass destruction

Administrative divisions

North Korea and weapons of mass destruction As of 2005, North Korea consists of two Directly-Governed Cities (Chikhalsi; 직할시; 直轄市), three special regions with various designations, and nine Provinces (See provinces of Korea). (Names are romanized according to the McCune-Reischauer system as officially used in North Korea; the editor was also guided by the spellings used on the 2003 National Geographic map of Korea). For historical information, see provinces of Korea and special cities of Korea.

Directly-governed cities

- P'yŏngyang Directly-governed City (P'yŏngyang Chikhalsi; 평양 직할시; 平壤直轄市)
- Rasŏn (Rajin-Sŏnbong) Chikhalsi (라선 (라진-선봉) 직할시; 羅先 (羅津-先鋒) 直轄市)

Special regions

- Kaesŏng Industrial Region (Kaesŏng Kong-ŏp Chigu; 개성 공업 지구; 開城工業地區)
- Kŭmgangsan Tourist Region (Kŭmgangsan Kwangwang Chigu; 금강산 관광 지구; 金剛山觀光地區)
- Sinŭiju Special Administrative Region (Sinŭiju T'ŭkbyŏl Haengjŏnggu; 신의주 특별 행정구; 新義州特別行政區)

Provinces

- Chagang Province (Chagang-do; 자강도; 慈江道)
- North Hamgyŏng Province (Hamgyŏng-pukto; 함경 북도; 咸鏡北道)
- South Hamgyŏng Province (Hamgyŏng-namdo; 함경 남도; 咸鏡南道)
- North Hwanghae Province (Hwanghae-pukto; 황해 북도; 黃海北道)
- South Hwanghae Province (Hwanghae-namdo; 황해 남도; 黃海南道)
- Kangwŏn Province (Kangwŏndo; 강원도; 江原道)
- North P'yŏngan Province (P'yŏngan-pukto; 평안 북도; 平安北道)
- South P'yŏngan Province (P'yŏngan-namdo; 평안 남도; 平安南道)
- Ryanggang Province (Ryanggang-do; 량강도; 兩江道--sometimes also spelled as 'Yanggang' in English)

Major cities

- Sinuiju
- Kaesong
- Nampho
- Chongjin
- Wonsan
- Hamhung - Hamnam
- Haeju
- Kanggye
- Hyesan See also Cities of North Korea

Geography

North Korea is on the northern portion of the Korean Peninsula that extends 1,100 km from the Asian mainland. North Korea shares its borders with three nations and two seas. To the west it borders the Yellow Sea and the Korea Bay and to the east it borders the Sea of Japan (East Sea of Korea). North Korea borders South Korea, China, and Russia. The highest point in Korea is the Paektu-san at 2,744 m and major rivers include the Tumen and the Yalu. The local climate is relatively temperate, with precipitation heavier in summer during a short rainy season called jangma, and winters that can be bitterly cold on occasion. North Korea's capital and largest city is P'yŏngyang; other major cities include Kaesŏng in the south, Sinŭiju in the northwest, Wŏnsan and Hamhŭng in the east and Ch'ŏngjin in the northeast. See also: Korean Peninsula

Economy

Korean Peninsula North Korea's economy has stagnated since the 1970s. The government refuses to release economic data, hence limiting the amount of reliable information available. Publicly owned industry produces nearly all manufactured goods. The government continues to focus on heavy military industry. The government is [http://geography.about.com/library/cia/blcnorthkorea.htm estimated] to spend around 25% (2005) of the nation's GDP on the military. The 1990s saw a series of natural disasters, political mismanagement crises and corruption scandals. This, along with the collapse of the Soviet bloc; has caused significant economic disruption. The agricultural outlook is poor, and some food products are deliberately diverted away from citizens and into the military. The combined effects of a reclusive regime, serious fertilizer shortages, and structural constraints — such as little arable land and a short growing season — have resulted in a shortfall of staple grain output of more than 1 million tons from what the country needs to meet internationally-accepted minimum requirements. [http://www.abc.net.au/foreign/content/2005/s1479934.htm Recent evidence] suggests serious food shortages. North Korea has previously (and may in the future) received international food and fuel aid from China, South Korea, and the United States in exchange for promises not to develop nuclear weapons. In June 2005, the U.S. announced that it would give 50,000 metric tons of food aid to North Korea. The United States gave North Korea 50,000 tons in 2004 and 100,000 tons in 2003. On 19 September 2005, North Korea was promised food and fuel aid (among other things) from South Korea, the U.S., Japan, Russia, and China in exchange for abandoning its nuclear weapons program and rejoining the Nuclear Non-Proliferation Treaty. It remains to be seen if this exchange will actually occur. The agreement was less than one day old before issues arose with its implementation. In July 2002, North Korea started experimenting with capitalism in the Kaesŏng Industrial Region. A small number of other areas have been designated as Special Administrative Regions, including Sinŭiju along the China-North Korea border. Mainland China and South Korea are the biggest trade partners of North Korea, with trade with China increasing 38% to $1.02 billion in 2003, and trade with South Korea increasing 12% to $724 million in 2003. It is reported that the number of mobile phones in P'yŏngyang rose from only 3,000 in 2002 to approximately 20,000 during 2004. As of June 2004, however, mobile phones became forbidden again. A small amount of capitalistic elements are gradually spreading from the trial area, including a number of advertising billboards along certain highways. Recent visitors have reported that the amount of open-air farmer markets have increased in Kaesong, P'yŏngyang, as well as the China-North Korea border, bypassing the food rationing system. See also: List of North Korean companies, Communications in North Korea, Transportation in North Korea

Human rights

[http://web.amnesty.org/library/eng-prk/index Amnesty International] and other human rights organizations accuse North Korea of having one of the worst human rights records of any nation, severely restricting most freedoms, including freedom of speech and freedom of movement, both inside the country and abroad. Japanese television aired what it said was [http://www.msnbc.msn.com/id/4397847/ footage of a prison camp]. The U.S. Committee for Human Rights in North Korea believes these camps hold between 150,000 and 200,000 inmates, and published a defector statement that pregnant women inside these camps reputedly either have forced abortions or the newborn child is killed ([http://ncafe.com/northkorea/SunOkLeeTestimony_w_llus.pdf] [PDF], [http://hrnk.org/hiddengulag/toc.html]). In some of the camps, former inmates say the annual mortality rate approaches 25% ([http://www.hrnk.org], [http://msnbc.msn.com/id/3071466]). A former prison guard and army intelligence officer [http://news.bbc.co.uk/1/hi/programmes/this_world/3436701.stm told the BBC] that in one camp, chemical weapons were tested on prisoners in a gas chamber. None of these claims can be verified, as North Korea denies them and does not grant entry to independent human rights observers. Less often discussed are the human rights implications of North Korea's famine, which killed between 600,000 ([http://www.news.harvard.edu/gazette/2003/11.13/13-koreaeat.html]) and 3.5 million people ([http://217.29.194.251/msfinternational/invoke.cfm?objectid=335007FE-29B7-4E69-B88BBDF0379FFE1A&component=toolkit.article&method=full_html&CFID=5514940&CFTOKEN=15148554] ), mostly during the 1990 s ([http://www.cnn.com/WORLD/asiapcf/9808/19/nkorea.famine]). By 1999, food and development aid reduced famine deaths, but North Korea's continuing nuclear program led to a decline in foreign aid. In the spring of 2005, the World Food Program reported that famine conditions were in imminent danger of returning to North Korea ([http://news.bbc.co.uk/2/hi/asia-pacific/4072280.stm]), and the government was reported to have mobilized millions of city-dwellers to help rice farmers ([http://query.nytimes.com/gst/abstract.html?res=F20810F6345D0C728CDDAF0894DD404482]).

Demographics

North Korea's population is one of the most ethnically and linguistically homogenous in the world, with very small Chinese and Japanese communities as the only non-Korean indigenous minorities. Most others are temporary residents, mostly being Russians and other East Europeans, Chinese, and Vietnamese. The Korean language is not a member of a wider linguistic family, though links to Japanese and Altaic languages are being considered. The Korean writing system, Hangul, was invented in the 15th century by King Se Jong the Great to replace the system of Chinese characters, known in Korea as Hanja, which are no longer officially in use in the North. North Korea continues to use the McCune-Reischauer romanization of Korean, in contrast to the South's revised version.

Religion

Religious activity is suppressed by the officially atheist state, especially Protestantism, which is seen as closely connected to the U.S. North Korea shares with South Korea a Buddhist and Confucianist heritage and recent history of Christian and Chondogyo ("Heavenly Way") movements. Pyongyang was the center of Christian activity before the Korean War. Today two state-sanctioned churches exist, which Christian advocates allege are mere show-cases for foreigners. [http://news.bbc.co.uk/1/hi/world/asia-pacific/4431321.stm]

Culture

There is a vast personality cult around Kim Il Sung and Kim Jong Il, and much of North Korea's literature, popular music, theater, and film glorify the two men. In July 2004, the Complex of Koguryo Tombs was the first site in North Korea to be included into the UNESCO list of World Heritage. See also: Culture of Korea, Korean cuisine, Music of Korea, Public holidays in North Korea

Tourism

In principle, any person is allowed to travel to North Korea, and among those who actually go through the complex application process, almost no one is refused entry by North Korea. Visitors are not allowed to travel outside designated tour areas without their Korean guides. Accounts of travels throughout the region can be found in the external links section. Tourists are not permitted on passports from the United States, although exceptions have been made in 1995, 2002 and 2005. Citizens of South Korea require special government permission from both governments to enter North Korea. In 2002, the area around Mount Kŭmgang, a scenic mountain close to the South Korea border, has been designated as a special tourist destination (Kŭmgangsan Tourist Region), where South Korean citizens do not need special permissions. Tours run by private companies bring thousands of South Koreans to Mount Kŭmgang every year. In July 2005 the South Korean company Hyundai Group came to an agreement with the North Korean government to open up more areas to tourism, including Mount Paektu and Kaesong.

Miscellaneous topics

- Korean friendship association
- Kimjongilia (national flower)

References

# Kang Chol-Hwan, The Aquariums of Pyongyang (New York: Basic Books, 2001) 146.

External links

-
- [http://www.foreignpolicy.com/story/cms.php?story_id=19 "Think Again: The Korea Crisis"] from Foreign Policy Magazine
- [http://www.opendemocracy.net/globalization-institutions_government/north_korea_2686.jsp A gulag with nukes: inside North Korea] by Jasper Becker
- [http://www.latimes.com/news/printedition/la-fg-extreme11nov11,0,899396.story?track=hpmostemailedlink Bizarre Trip of a Lifetime] from the Los Angeles Times, about a group of American "extreme travelers" who visited North Korea in the fall of 2005

North Korean organizations

- Chongryon

Links associated with North Korean government

- [http://www.korea-dpr.com/library/201.pdf Kim Il Sung]: 10 Point programme for reunification of the country
- [http://www.korea-dpr.com/ korea-dpr.com] - Website officially associated with North Korea. (Maintained from a Texas server by the Korean Friendship Association.)
- [http://www.kcckp.net/en/ Naenara] ("My country," in Korean) DPRK's Official Web Portal
- [http://www.kcna.co.jp The Korean Central News Agency, The DPRK's news service.]

Web sites about North Korea

- [http://www.seoultrain.com "Seoul Train" documentary] A critically acclaimed PBS documentary on North Korean refugees (Incite Productions)
- [http://www.nkzone.org/nkzone North Korean Zone], a blog dealing with news related to North Korea]
- [http://www.cia.gov/cia/publications/factbook/geos/kn.html CIA World Factbook - North Korea]
- [http://lcweb2.loc.gov/frd/cs/kptoc.html Library of Congress - Country Studies: North Korea] - data as of June 1993
- [http://news.bbc.co.uk/1/hi/world/asia-pacific/country_profiles/1131421.stm BBC News - Country Profile: North Korea]
- [http://news.bbc.co.uk/1/shared/spl/hi/picture_gallery/05/asia_pac_unseen_north_korea/html/1.stm BBC News - In pictures: Unseen North Korea]
- [http://www.guardian.co.uk/korea/0,2759,331519,00.html Guardian Unlimited - Special Report: North and South Korea]
- [http://www.simonbone.com/myohyang.html Happy Birthday, North Korea] - detailed account of travel to 3 sanctioned areas
- [http://uk.geocities.com/hkgalbert/kpmap.htm Korean Tourist Map]
- [http://search.looksmart.com/p/browse/us1/us317916/us559898/us559967/us559991/ LookSmart - North Korea] directory category
- [http://www.nkzone.org/nkzone NKzone] - discussions and information exchange on North Korea
- [http://mapage.noos.fr/jeejee/north_korea.html North Korea Resources] - background news and analysis of North Korea
- [http://dmoz.org/Regional/Asia/North_Korea/ Open Directory Project - North Korea] directory category
- [http://www.pyongyang-metro.com/ Pyongyang Metro System Unofficial Web Site - 1]
- [http://www.koryogroup.com Tours / Tourism page of North Korea, with links to other North Korea related sites]
- [http://www.latimes.com/news/printedition/la-fg-chongjin4jul04,1,1445590.story?ctrack=1&cset=true Trading Ideals for Sustenance] Second part of Los Angeles Times expose on changing North Korean life (July 4, 2005)
- [http://dir.yahoo.com/Regional/Countries/Korea__North/ Yahoo! - North Korea] directory category
- [http://news.yahoo.com/fc?cid=34&tmpl=fc&in=World&cat=North_Korea Yahoo! News - Full Coverage: North Korea]
- [http://times.discovery.com/convergence/insidenorthkorea/video/video.html Children of a Secret State]: Human rights of children in North Korea (Discovery Channel)
- [http://www.voanews.com/english/north_korea_reporters_notebook.cfm North Korea: A Reporter's Notebook] — Luis Ramirez (Voice of America)

Web sites criticizing North Korea

- [http://freekorea.blogspot.com One Free Korea] - Blog focusing on human rights conditions in North Korea
- [http://times.hankooki.com/special/special_edition1_list.htm Another Korea] - Background stories on North Korea
- [http://www.soonoklee.org/freenk.cgi Soon Ok Lee project] - website calling for Christian solidarity with Korean refugees.
- [http://www.dailynk.com/english/index.php Daily NK] - North Korea focused daily online newspaper
- [http://www.chosunjournal.com/ ChosunJournal] - website focused on DPRK human rights
- [http://nkhumanrights.or.kr/NKHR_new/index_eng_new.htm Citizens' Alliance for North Korean Human Rights] - Witness accounts of refugees Category:East Asian countries zh-min-nan:Tiâu-sián ko:조선민주주의인민공화국 ms:Korea Utara ja:朝鮮民主主義人民共和国 simple:North Korea th:ประเทศเกาหลีเหนือ

Liechtenstein

The Principality of Liechtenstein (German: Fürstentum Liechtenstein) is a tiny, landlocked country in Western Europe, bordered by Switzerland to its west and by Austria to its east. Mountainous, it is a winter sports resort, though it is perhaps best-known as a tax haven.

History

Main article: History of Liechtenstein The modern territory of Liechtenstein formed at one time (an albeit diminutive) part of the ancient Roman province of Raetia. For centuries this territory, geographically removed from European strategic interests, had little impact on the tide of European history. Prior to the reign of its current dynasty, the region was enfiefed to a junior line of the House of Habsburg. The Liechtenstein dynasty, from which the Principality takes its name (rather than vice-versa), takes its name from Castle Liechtenstein in faraway Lower Austria, which the family possessed from at least 1140 to the 13th century, and from 1807 onwards. Through the centuries, the dynasty acquired vast swathes of land, predominantly in Moravia, Lower Austria , Silesia and Styria, though in all cases, these territories were held in fief under other more senior feudal lords, particularly under various lines of the Habsburg family, which several Liechtenstein princes served as close advisors. Thus, and without any territory held directly under the Imperial throne, the Liechtenstein dynasty was unable to meet a primary requirement to qualify for a seat in the Imperial diet, the Reichstag. The family yearned for the added power which a seat in the Imperial government would garner, and therefore searched for lands to acquire which would be "unmittelbar" or held without any feudal personage other than the Emperor himself having rights on the land. After some time, the family was able to arrange the purchase of the minuscule counties of Schellenberg and Vaduz (in 1699 and 1712 respectively) from an agnatic line of the Habsburg dynasty. Tiny Schellenberg and Vaduz possessed exactly the political status required, no feudal lord other than their comital sovereign and the suzerain Emperor. Thereby, on January 23, 1719, after purchase had been duly made, Emperor Charles VI decreed the counties of Vaduz and Schellenberg raised to the dignity of principality with the name "Liechtenstein" in honour of [his] 'true servant, Anton Florian of Liechtenstein'. It is on this date that Liechtenstein became a sovereign state of the Holy Roman Empire. Ironically, but as testament to the pure political expediency of the purchases, the Princes of Liechtenstein did not set foot in their new principality for several decades. Holy Roman Empire In 1806, the Holy Roman Empire was invaded by France. This event had broad consequences for Liechtenstein: Imperial legal and political mechanisms broke down, while the Holy Roman Emperor abdicated the imperial throne. The Empire itself dissolved. As a result, Liechtenstein ceased to have any obligations to any feudal lord beyond its borders. Modern publications generally (although incorrectly) attribute Liechtenstein's 'sovereignty' to these events. In reality, its prince merely became suzerain as well as remaining sovereign lord. Until the end of World War I, Liechtenstein was closely tied to Austria. However, the economic devastation caused by that conflict forced the country to conclude a customs and monetary union with its other neighbour, Switzerland. During World War II, Liechtenstein remained neutral, while family treasures within the war zone were brought to Liechtenstein (and London) for safekeeping. At the close of the conflict, Czechoslovakia and Poland, acting to seize "German" possessions, expropriated the entirety of the Liechtenstein dynasty's hereditary lands and possessions in Bohemia, Moravia and Silesia - the Princes of Liechtenstein lived in Vienna until 1938. The expropriations (subject to modern legal dispute at the World Court) included over 1,600 km² of agricultural and forest land, including also several family castles and palaces. It is thus little wonder that during the decades of the Cold War, citizens of Liechtenstein were forbidden by Czechoslovakia from even entering that country. In financial straits following the war, the Liechtenstein dynasty often resorted to selling family artistic treasures, including for instance Da Vinci's priceless portrait "Ginevra de Benci", which was purchased by the United States government. However, the economic condition of Liechtenstein improved rapidly. During the decades following, Liechtenstein prospered, its economy modernizing with the advantage of low corporate tax rates which drew many companies to the country. The Prince of Liechtenstein is among the world's wealthiest heads-of-state, with an estimated wealth of 2 billion dollars. The country's population enjoys one of the world's highest standards of living.

Politics

Main article: Politics of Liechtenstein Liechtenstein is a constitutional monarchy headed by its ruling prince or Fürst. The current prince is Hans-Adam II of Liechtenstein, who succeeded upon his father's death in 1989. The parliament of Liechtenstein, the Landtag, consists of 25 representatives chosen by the people. A cabinet of five members is responsible for daily political matters. In a referendum on July 1, 1984, male voters granted women the right to vote in national (though not local) elections, a victory for Prince Hans-Adam who had supported the legislation. Unlike many other constitutional monarchies, the constitution of Liechtenstein gives many important powers to the Prince, some of which have caused controversy in recent years. Critics were, however, largely discredited when in March 2003, a popular referendum bolstered the Liechtenstein dynasty's constitutional position. Prior to the referendum, Prince Hans-Adam had announced that he and his family would relocate to Vienna, Austria if the House's constitutional prerogatives were curbed. The referendum confirmed the broad popularity of the Liechtenstein dynasty and underscored the populace's faith in Prince Hans-Adam as leader. The parliamentary elections of March 11 and 13th, 2005 resulted in the government of Otmar Hasler losing its general majority in the Landtag. By April he had formed a coalition government with the main opposition party.

Communities

Main article: Communities of Liechtenstein Liechtenstein is divided among eleven communities (Gemeinden - singular Gemeinde), most consisting of only a single town. These are: Communities of Liechtenstein
- Vaduz
- Schaan
- Balzers
- Triesen
- Eschen
- Mauren
- Triesenberg
- Ruggell
- Gamprin
- Schellenberg
- Planken
- Arsch

Geography

Arsch Main article: Geography of Liechtenstein Liechtenstein is situated in the Upper Rhine valley of the European Alps. The entire western border of Liechtenstein is formed by the river. In its east, Liechtenstein rises to higher altitudes, its highest point, the Grauspitz, reaches 2,599 m (8,527 ft.). Despite its alpine location, prevailing southerly winds make the climate of Liechtenstein rather mild. In winter, the mountain slopes are well suited to winter sports. Liechtenstein is one of only two doubly landlocked countries in the world; i.e., a landlocked country surrounded by other landlocked countries. (The other example is Uzbekistan). It is the only country with a majority of German-speaking people that does not share a border with Germany (though there are substantial German-speaking minorities in Argentina, Brazil and Namibia).

Economy

Main article: Economy of Liechtenstein Despite its small geographic area and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy, and boasts a financial service sector and also living standard which compare favourably to those of the urban areas of Liechtenstein's large European neighbours. Advantageously low business taxes – the maximum tax rate is 18% – as well as easy Rules of Incorporation have induced about 73,700 holding (or so-called 'letter box') companies to establish nominal offices in Liechtenstein. Such processes provide about 30% of Liechtenstein's state revenue. Recently, Liechtenstein has shown strong determination to dispel the country's unhelpful image as a centre of international money-laundering. Liechtenstein participates in a customs union with Switzerland and employs the Swiss franc as national currency. The country imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe. Since 2002, Liechtenstein's rate of unemployment has doubled, although it stood at only 2.2% in the third quarter of 2004.

Demographics

Main article: Demographics of Liechtenstein Liechtenstein is the fourth smallest country of Europe, after Vatican City, Monaco, and San Marino. Its resident population is approximately 1/3 foreign-born, primarily Germans, Austrians, and Swiss. The official language is German, though most speak an Alemannic (and highly divergent) dialect of German, see Middle High German. About 76% of the population adhere to the Roman Catholic faith, about 7% are Protestant. On November 27, 2005, Liechtenstein voters rejected an initiative that would prohibit abortion, birth control, and living wills in the principality. Instead, a government-sponsored counterproposal was ratified. The anti-abortion initiative was supported by Roman Catholic Archbishop Wolfgang Haas. Hereditary Prince Alois was initially sympathetic to anti-abortion proposal, but became neutral during the run-up to the vote. [http://www.cbsnews.com/stories/2005/11/27/ap/world/mainD8E54DFG0.shtml]

Transport

There is about 250 km of paved roadway within Liechtenstein, and 9.5 km of railway. The country's rails are administered by the Austrian Federal Railways as part of the route between Feldkirch, Austria, and Buchs SG, Switzerland. Four stations in Liechtenstein, including Schaan-Vaduz, Forst Hilti, Nendeln, and Schaanwald, are served by an irregular stopping-train service running between Feldkirch and Buchs. While EuroCity and other long distance international trains also make use of the route, these do not call at Liechtenstein stations. Liechtenstein Bus is a subsidiary of the Swiss Postbus system, and connects to the Swiss bus network at Buchs SG and at Sargans.

Culture

Due to Liechtenstein's small size, the country has been strongly affected by external cultural influences, most notably the those originating in the southern German-speaking areas of Europe, including Austria, Bavaria, Switzerland, and the Tyrol. The Historical Society of the Principality of Liechtenstein plays a role in preserving the culture and history of the country.

Sport

Liechtenstein football teams play in the Swiss football leagues. The Liechtenstein Cup allows access to one Liechtenstein team each year in the UEFA Cup -- FC Vaduz, a team playing in the Swiss Challenge League (i.e. the second level of Swiss football) is the most successful team in the Cup, and scored their greatest success in the European Cup Winners' Cup in 1996 when they defeated the Latvian team FC Universitate Riga by 1:1 and 4:2, to go on to a lucrative fixture against Paris St Germain, which they lost 0:4 and 0:3. The Liechtenstein national football team has traditionally been regarded as an easy target for any team drawn against them, a fact that served as the basis for a book about Liechtenstein's disastrous qualifying campaign for the 2002 World Cup by British author Charlie Connelly. In autumn 2004, however, in an astonishing week the team managed a 2:2 draw with Portugal, who only a few months earlier had been the losing finalists in the European Championships, and went on four days later to defeat Luxembourg by 4 goals to 0 in Luxembourg, in qualification matches for the 2006 World Cup. As an alpine country, the main opportunity for Liechtensteiners to excel is in winter sports such as downhill skiing: Hanni Wenzel won two Olympic titles in 1980.

External links

- [http://www.liechtenstein.li/en/eliechtenstein_main_sites/portal_fuerstentum_liechtenstein/home.htm Principality of Liechtenstein] - Official State site
-
- Sarah Lyall, [http://www.nytimes.com/2003/03/25/international/europe/25LIEC.html "For Rent: One Principality. Prince Not Included."] New York Times, 25 March 2003.
- [http://www.cbsnews.com/stories/2005/11/27/ap/world/mainD8E54DFG0.shtml "Liechtenstein Rejects Anti-Abortion Measure"] from CBS News, November 27, 2005, retrieved November 28, 2005 Category:European microstates Category:Liechtenstein Category:Monarchies Category:Principalities Category:Landlocked countries zh-min-nan:Liechtenstein als:Liechtenstein ko:리히텐슈타인 ms:Liechtenstein ja:リヒテンシュタイン simple:Liechtenstein th:ประเทศลิกเตนสไตน์ fiu-vro:Liechtenstein

Monaco

Monaco, more formally, the Principality of Monaco (in French: Principauté de Monaco; in Monegasque: Principatu de Munegu) is a city state and one of the European microstates. It is located between the Mediterranean Sea and France along the French Riviera, near the French border with Italy. Monaco is the most densely populated independent country in the world¹ and the world's second-smallest independent country.

History

Main article: History of Monaco Monaco derives its name from the nearby Greek colony, Monoikos, founded in the 6th century BCE by the Phoceans. According to an ancient myth, Hercules passed through the Monaco area. A temple was constructed there by Phoceans, the temple of Hercules Monoikos (Μόνοικος means single house or single temple). Hercules with a sword under his frock]] Monaco was re-founded in 1215 as a colony of Genoa. Monaco has been ruled by the House of Grimaldi since 1297, when François Grimaldi (aka: Malizia) seized the fortress protecting the famous rock while dressed up as a Franciscan monk (monaco in Italian); the only exception to this was from 1793 to 1814, when Monaco was under French control. Designated as a protectorate of Sardinia from 1815 until 1860 by the Congress of Vienna, Monaco's sovereignty was recognised by the Franco-Monegasque Treaty of 1861. Until the 1911 constitution, the Princes of Monaco ruled absolutely. In July 1918, a treaty was signed providing for limited French protection over Monaco. The treaty, part of the Treaty of Versailles, established that Monegasque policy would be aligned with French political, military, and economic interests. Rainier III, Prince of Monaco acceded to the throne following the death of his grandfather, Prince Louis II, in 1949. A new constitution, proclaimed in 1962, abolished capital punishment, provided for female suffrage, and established a Supreme Court to guarantee fundamental liberties. In 1993, Monaco became a member of the United Nations, with full voting rights. In 2002, a new treaty between France and Monaco clarifies that if there are no heirs to carry on the dynasty, the Principality will remain an independent nation rather than revert to the French. Monaco's military defence, however, is still the responsibility of France. Prince Albert, Marquis of Baux took over the royal duties on 31 March 2005 because his father Prince Rainier III was too ill to exercise his royal functions. On 6 April 2005, Prince Rainier died and his son succeeded him as Albert II of Monaco. Prince Albert II of Monaco formally became the ruler of Monaco on July 12, 2005 in a celebration that began with a solemn Mass at the cathedral where his father was buried three months before, after a reign of 56 years. His accession to the throne was a two-step event with another ceremony drawing heads of state for an elaborate ceremony held on November 19, 2005.

Politics

Main article: Politics of Monaco Monaco has been governed as a constitutional monarchy since 1911, with the Sovereign Prince of Monaco as head of state. The executive branch consists of a Minister of State (the head of government), who presides over a four-member Council of Government (the cabinet). The Minister of State is a French citizen appointed by the Prince from among candidates proposed by the French Government. Under the 1962 constitution, the Prince shares his power with the unicameral National Council (parliament). The 24 members of this legislative body are elected from lists by universal suffrage for five-year terms. The principality's local affairs are directed by the Communal Council, which consists of 15 elected members and is presided over by the Mayor.

Geography

universal suffrage Main article: Geography of Monaco The Principality of Monaco is the second-smallest independent state in the world, after Vatican City. It is located on the Mediterranean coast, 18 kilometres east of Nice and near the Italian border, and is surrounded on three sides by the Provence-Alpes-Côte d'Azur Région of France. It consists of a narrow strip along the coast at the bottom of the foothills of the Alps and its highest point is "Le Rocher" at 140 m. Monaco is divided into seven sections or quarters (quartiers): Monaco-Ville, the capital, the old city on a rocky promontory extending into the Mediterranean known as the Rock of Monaco; La Condamine, the section along the port; Monte Carlo, the principal residential and resort area with the casino; Fontvieille, a newly constructed area reclaimed from the sea; Moneghetti, on the western border with Cap d`Ail; Larvotto - Tenao includes the beach area to the east of the principality. Saint Roman is the easternmost tip, bordering the Tenao. The principality is noted for its beautiful natural scenery and mild, sunny climate. The average minimum temperature in January and February is 8 °C (47 °F); in July and August the average maximum temperature is 26 °C (78 °F). Monaco is a narrow costal strip. Its physical geography includes a long beach which account for a vast part of Monaco's border, and steep cliffs that rise vertically upwards to heights of 206 ft above sea level.

Economy

climate climate Main article: Economy of Monaco One of Monaco's main sources of income is tourism; each year many are attracted to its casino and pleasant climate. In 2001, a major new construction project extended the pier used by cruise ships in the main harbour. The Principality has successfully sought to diversify into services and small, high-value-added, non-polluting industries. The state has no income tax for individuals. The state retains monopolies in numerous sectors, including tobacco and the postal service. The telephone network used to be owned by the state. Now Monaco Telecom is 49% owned by Cable and Wireless, 45% by the state and 6% by Compagnie Monégasque de Banque, but is still a monopoly. Living standards are high, roughly comparable to those in prosperous French metropolitan areas. The lack of personal income tax has led to a considerable number of wealthy "tax refugee" residents from European countries, who earn the majority of their income from activity outside Monaco; celebrities like Formula One drivers attract most of the attention but the majority of them are business people. In 2000 a [http://www.assemblee-nat.fr/rap-info/i2311-2.asp report] by French parliamentarians Arnaud Montebourg and Vincent Peillon alleged that Monaco has lax policies with respect to money laundering, including within its famed casino, and that the government of Monaco puts political pressure on the judiciary so that alleged crimes are not properly investigated. In response, the Government of Monaco ordered reports to OECD and the Financial Action Task Force on Money Laundering. These reports revealed most of these allegations to be untrue. Monaco is not a member of the European Union, but is very closely linked to it via a customs union with France and as such its currency is the same as France's: the euro. Monaco has acquired the right to mint euro coins with Monegasque designs on their national side. Monaco's major exports are ceramics, metal works, textiles, plastics, and instruments.

Demographics

euro coinsMain article: Demographics of Monaco Monaco has the largest police force and police presence in the world, both per capita and per area. Monaco's population is unusual in that the native Monegasques are a minority in their own country. The largest proportion of residents are French nationals (47%), while Monegasque and Italian nationals represent 16% each, and the remaining 21% belong to one of the other 125 nationalities that make up Monaco's international population. French is the only official language, but English, Italian, and the local Monegasque language (a descendant of Genoese) are also spoken. The literacy rate is 99%. Roman Catholicism is the official religion, with freedom of other religions guaranteed by the constitution.

Self-identity

On the occasion of his investiture in 2005, Prince Albert II [http://www.gouv.mc/304/wwwnew.nsf/1909$/5f6fb679535702dac125703e004f618cgb?OpenDocument&4Gb gave a speech] which "evoke[d] who we are":
- We are a community with its own values, which are similar to those of our neighbors but which have a special combination which sets us apart.
- We come from Liguria and Genoa. We are the children of Greece, Rome and Christendom: our Catholic, apostolic and Roman State religion is there to remind us.
- We adhere to the principles of Human Rights, fruit of the philosophical reflections of the age of Enlightenment of our French neighbors and friends and the countless reforms and improvements made

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