Economy of Comoros

One of the world's poorest countries, Comoros is made up of three islands that have inadequate transportation links, a young and rapidly increasing population, and few natural resources. The low educational level of the labor force contributes to a subsistence level of economic activity, high unemployment, and a heavy dependence on foreign grants and technical assistance. Agriculture, including fishing, hunting, and forestry, is the leading sector of the economy. It contributes 40% to GDP, employs 80% of the labor force, and provides most of the exports. The country is not self-sufficient in food production; rice, the main staple, accounts for the bulk of imports. The government is struggling to upgrade education and technical training, to privatize commercial and industrial enterprises, to improve health services, to diversify exports, to promote tourism, and to reduce the high population growth rate. Continued foreign support is essential if the goal of 4% annual GDP growth is to be met.

[http://earthtrends.wri.org/text/economics-business/variable-638.html Current GDP per capita] of Comoros grew 55% in the Eighties. But this proved unsustainabe and it consequently shrank by 42% in the Nineties.

Comoros, with an estimated gross domestic product (GDP) per capita income of about $700, is among the world's poorest and least developed nations. Although the quality of the land differs from island to island, most of the widespread lava-encrusted soil formations are unsuited to agriculture. As a result, most of the inhabitants make their living from subsistence agriculture and fishing. Average wages in 2007 hover around $3-4 per day.

Agriculture

Agriculture, involving more than 80% of the population and 40% of the gross domestic product, provides virtually all foreign exchange earnings. Services including tourism, construction, and commercial activities constitute the remainder of the GDP. Plantations engage a large proportion of the population in producing the islands' major cash crops for export: vanilla, cloves, perfume essences, and copra. Comoros is the world's leading producer of essence of y _yl. Moroni on Grande Comore, despite recent improvements. Long-distance, ocean-going ships must lie offshore and be unloaded by smaller boats; during the cyclone season, this procedure is dangerous, and ships are reluctant to call at the island. Most freight is sent first to Mombasa or Réunion and transshipped from there.

External trade

France, Comoros' major trading partner, finances small projects only. The United States receives a growing percentage of Comoros' exports but supplies only a negligible fraction of its imports (less than 1%).

Comoros has an international airport (Prince Said Ibrahim International Airport) at Hahaya on Grande Comore. It is a member of the franc zone with an exchange rate of 491.9677 Comorian francs (KMF) = 1 [Euro] .

Additional information

During the colonial period, the French and local leading citizens established plantations to grow cash crops for export. Even after independence, French companies, such as Société Bambao and Établissements Grimaldi--and other concerns, such as Kalfane and Company and later, President Abdallah's Établissements Abdallah et Fils--dominated the Comoran economy. These firms diverted most of their profits overseas, investing little in the infrastructure of the islands beyond what was needed for profitable management of the plantations, or what could benefit these businesses' associates or related concerns. A serious consequence of this approach has been the languishing of the food-crop agricultural sector and the resultant dependence on overseas food imports, particularly rice. In 1993 Comoros remained hostage to fluctuating prices on the international market for such crops as vanilla, y _yl. Regional/Africa/Comoros/Business_and_Economy/Economic_Development
* [http://www.imf.org/external/np/loi/2005/com/020205.pdf Letter of Intent and a Memorandum of Economic Policies of the government of Union of the Comoros] PDF file