The Ivoirian economy is largely market-based and depends heavily on the agricultural sector. Between 60% and 70% of the Ivoirian people are engaged in some form of agricultural activity. The economy performed poorly in the 1980s and early 1990s, and high population growth coupled with economic decline resulted in a steady fall in living standards. Gross national product per capita was $727 in 1996 but had fallen to $669 by 2003. (It was substantially higher two decades ago.) A majority of the population remains dependent on smallholder cash crop production. Principal exports are cocoa, coffee, cotton, pineapples, tuna, and tropical woods. Principal U.S. exports are rice and wheat, plastic materials and resins, Kraft paper, agricultural chemicals, telecommunications, and oil and gas equipment. Principal U.S. imports are cocoa and cocoa products, petroleum, rubber, and coffee.

Foreign Direct Investment Statistics
Direct foreign investment plays a key role in the Ivoirian economy, accounting for between 40% and 45% of total capital in Ivoirian firms. France is overwhelmingly the most important foreign investor. In recent years, French investment has accounted for about one-quarter of the total capital in Ivoirian enterprises, and between 55% and 60% of the total stock of foreign investment capital.

Infrastructure
By developing country standards, Cote d'Ivoire has an outstanding infrastructure. There is an excellent network of more than 8,000 miles of paved roads; good telecommunications services, including a public data communications network; cellular phones and Internet access. There are two active ports. Abidjan is the most modern in West Africa and the largest between Casablanca and Cape Town on the West African littoral; rail links from the port north into Burkina Faso which are being upgraded; regular air service within the region and to and from Europe; and modern real estate developments for commercial, industrial, retail, and residential use. Despite the crisis that erupted in September 2002, Cote d'Ivoire's location and easy, reliable connection to neighboring countries continues to make it a preferred platform from which to conduct West African operations. Abidjan remains one of the most modern and livable cities in the region. Its school system is good by regional standards and includes an international school (whose enrollment dropped sharply due to the crisis) based on U.S. curriculum and several excellent French-based schools.

Recent political and economic problems have delayed Cote d'Ivoire's planned public investment program. The government's public investment plan accords priority to investment in human capital, but it also will provide for significant spending on economic infrastructure needed to sustain growth. Continued infrastructure development has been brought into question because of private sector uncertainty. In the new environment of government disengagement from productive activities and in the wake of recent privatization, anticipated investments in the petroleum, electricity, water, and telecommunications sectors, and in part in the transportation sector, will be financed without any direct government intervention. A return to political and economic stability is critical if Cote d'Ivoire is to realize its potential in the region.

Major Trends and Outlooks
Since the colonial period, Cote d'Ivoire's economy has been based on the production and export of tropical products. Agriculture, forestry, and fisheries account for more than one-third of GDP and two-thirds of exports. Cote d'Ivoire produces 40% of the world's cocoa crop and is a major exporter of bananas, coffee, cotton, palm oil, pineapples, rubber, tropical wood products, and tuna. The 1994 devaluation of the CFA franc and accompanying structural adjustment measures increased the international competitiveness of the agricultural, light industrial, and service sectors. However, reliance on raw cocoa and coffee exports, which account for 40% of total exports, exposes the economy to the ups and downs of international price swings. To reduce the economic exposure to price variability, the government encourages export diversification and intermediate processing of cocoa beans.

The 1994 devaluation of the CFA franc helped return Cote d'Ivoire to rapid economic growth until the slow-down evident by 1999. Increased aid flows, rigorous macroeconomic policies, and high international commodity prices, along with devaluation, yielded 6-7% annual GDP growth rates from 1994-98. Cote d'Ivoire also benefited from Paris Club debt rescheduling in 1994, a London Club agreement in 1996, and the 1997 G-7 decision to include Cote d'Ivoire in the IMF-World Bank debt forgiveness initiative for highly indebted poor countries.

With the economic improvement, Cote d'Ivoire began turning the corner on its daunting debt load. For several years running, it met its IMF targets for growth, inflation, government finance, and balance of payments. Government revenues increased, which in combination with spending restraint resulted in 3 years of primary surpluses (that is, receipts minus expenditure, excluding borrowing and debt service). Following a concerted government repayment effort, domestic arrears were virtually eliminated by the end of 1996. The pre-devaluation stagnation which caused local businesses and potential outside investors to delay capital expenditures accentuated the post-devaluation investment boom.

Lower inflation followed as the government kept a tight lid both on salary increases and on the size of the public sector work force devaluation and has continued with the economic slow down of the last several years. The consumer price index measure of inflation slide from 13.6% in 1995 to 5.4% in 1997 and 0.7% in 1999. Through the first three quarters of 2003, inflation was estimated at 3.0%, according to the Ivoirian Institute of Statistics. In the past several years, economic decline has resulted in declining living standards. Falling commodity prices along with government corruption and fiscal mismanagement brought the economy to its knees by the end of 1999. At that point, the coup d'etat and the subsequent institution of the military junta government caused the loss of foreign assistance. Private foreign investment declined precipitously. Government internal and external debt ballooned. As a result, the Ivoirian economy contracted 2.3% in 2000. The government signed a Staff Monitoring Program with the IMF in July 2001, but plans for a subsequent Poverty Reduction and Growth Facility were disrupted by the onset of the crisis in September 2002. The signs of economic and business recovery were encouraging in the mid-year of 2002, but the political and social crisis that began in September 2002 undermined all the efforts to resume cooperation with international donors. The economic revival will be dependent on achieving a lasting peace.