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                     Key Economic Indicators
        (Millions of U.S. dollars unless otherwise noted)

                                   1992      1993      1994 1/

Income, Production and Employment:

Real GDP (1989 prices) 2/         4,212     4,316     4,293
Real GDP Growth (pct.)             -1.5       2.5      -0.5
GDP (at current prices) 2/        5,021     4,824     3,654
By Sector:
  Agriculture                       466.7     450.5     326.6
  Industry                        2,378.4   2,443.1   2,150.7
  Oil                             1,720.3   1,626.1   1,558.4
  Non-Oil                           652.4     629.3     456.2
  Construction                      194.3     187.6      36.0
  Services                        2,631.6   2,571.3   1,484.9
Real Per Capita GDP ($:1989 base)   4,254     4,272     4,127
Labor Force (000s)                   89.3      89.5       N/A
Unemployment Rate (pct.)              N/A       N/A       N/A

Money and Prices:  (annual percentage growth)

Money Supply (M2)                  -11.23     -4.66     19.46
Base Interest Rate (pct.) 3/         12.0      11.5      12.0
Personal Saving Rate (pct.)            23        22       N/A
Retail Inflation (pct.)              -4.6       1.3      48.2
Wholesale Inflation (pct.)            N/A       N/A       N/A
Consumer Price Index (100=75)       283.0     286.7     400.8
Exchange Rate (USD/CFA)
  Official                            265       283       530
  Parallel                            N/A       N/A       N/A

Balance of Payments and Trade:

Total Exports (FOB) 4/            2,259.1   2,113.7   1,883.0
  Exports to U.S.                   927.9     940.6     543.2 5/
Total Imports (FOB) 4/              886.2     835.2     741.1
  Imports from U.S.                  54.7      48.2      20.0 5/
Aid from U.S. (000's)               168       168         N/A
Aid from Other Countries            125        12         N/A
External Public Debt              3,350.9   3,358.4   3,442.0
Debt Service Payments (paid)        351.7     119.0     463.7
Gold and Foreign Exch. Reserves      75.3       5.0       N/A
Trade Balance 4/                  1,372.4   1,278.5   1,141.8
  Trade Balance with U.S.           873.2     892.4     543.2 5/

N/A--Not available.

1/ 1994 figures are all estimates based on available monthly
data in October 1994.
2/ GDP at factor cost.
3/ Figures are actual, average annual interest rates, not
changes in them.
4/ Merchandise trade.
5/ Figure is based on January-June data.

1.  General Policy Framework

    The Gabonese economy is dominated by petroleum and mining
production, which together contribute nearly 40 percent of
gross domestic product (GDP).  Oil is the key variable, as the
petroleum industry generates 80 percent of Gabon's export
earnings and nearly half of government revenues.  Although most
finished goods are imported, there is some manufacturing in
Gabon including a brewery, an oil refinery, and factories which
produce plywood, plastics and cigarettes.  The remaining
manufacturing is concentrated in the initial transformation of
Gabon's raw materials (e.g., a uranium "yellowcake" plant
located adjacent to the uranium mine at Mounana in southeastern
Gabon, and a petroleum refinery located at Port Gentil).  The
civil service accounts for over 10 percent of GDP by itself.  A
wide range of tertiary activities ranging from banking to legal
and accounting services and business consulting also figure
prominently in the economy.

    Since oil prices weakened sharply in 1986, the Gabonese
government has been in fiscal crisis.  Large deficits have led
Gabon to turn to foreign creditors for financing.  Following
years of arrears accumulation and the January 1994 devaluation
of the CFA (African Financial Community) franc, Gabon reached
an agreement with the IMF in March 1994 on a stand-by
arrangement and a compensatory and contingency financing
facility.  This was followed by Gabon's sixth Paris Club debt
rescheduling, a ten-year agreement with the London Club of
private creditors, a World Bank economic recovery credit, and a
credit from the African Development Bank for general budget
support.  Despite these arrangements, government revenue
remains depressed and expenditures have not been significantly

    Monetary policy is tight, exercised through adjustments in
the Central Bank discount rate, ceilings on net lending, and
adjustments in bank reserve requirements.  Given the
arrangements of the Franc Zone, monetary policy is not used as
a tool for sectoral policies and is largely neutral in its
effect on the competitiveness of U.S. exports.

2.  Exchange Rate Policy

    As a member of the CFA Franc Zone, Gabon has no flexibility
in monetary and exchange policies.  The value of the CFA franc
is currently set at 100 CFAF per French franc.  While this
mechanism assures exporters and importers of the convertibility
of the currency, it ensures a fixed exchange rate vis-a-vis the
French franc only.  Thus, it discriminates in practice against
imports from outside France in that prices for French goods can
be more readily anticipated and transactions with France are
simpler than those with other countries.

    Although the CFA franc is fully convertible, the Central
Bank exercises administrative control over foreign exchange 
transactions.  Outflows of foreign exchange must be justified
with an invoice or other contractual document, which must be
accepted by the the Central Bank before the commercial bank may
complete the transaction.  Generally, these controls appear to
be little more than an administrative formality, and there are
no known instances where exchange controls have been used to
impede the operations of U.S. firms.

3.  Structural Policies

    The Gabonese government levies a personal income tax, a
corporate income tax, a value-added tax and customs duties on
imports.  The government draws a major component of its
revenues from oil royalties.  Newly founded small- and
medium-sized businesses (SMBs) routinely receive tax holidays
for up to five years, and the government uses similar
incentives without discrimination by nationality to attract oil
exploration companies.  The personal income tax is widely
evaded.  Customs duties have recently been lowered, but here
too, collection is inefficient.  In the past, some observers
estimated the annual loss in revenues due to fraud and
smuggling to be as high as $100 million.

    The effects of the devaluation of the CFA franc in January
1994 and the implementation of the newly enacted budget law
have yet to be fully determined.  Inflation surges prompted the
government to impose price controls on certain staples at the
retail level at the beginning of 1994.

4.  Debt Management Policies

    Gabon has experienced a sharp increase in its indebtedness
since the international oil price drop of 1986.  External debt
rose from about $1 billion in 1985 to $3.5 billion in 1993, or
96 percent of projected 1994 GDP.  The country was in the grips
of stagflation and the internal arrears of the government
threatened to paralyze the domestic financial system.  Gabon
rescheduled its private debts with the London Club in 1987 and
in 1994.  It has been to the Paris Club six times, most
recently in April 1994.

    Faced with recurrent domestic political crises since late
1989, the government considered itself unable to implement
necessary fiscal reforms.  It suspended debt repayments on most
foreign obligations in early 1990.  Its history with the Paris
and London Clubs is checkered, sometimes difficult.  The
Gabonese government was unable to meet obligations under the
September 1991 Paris Club, and the agreement was "pulled back"
a year later.

    Negotiations with the IMF have often been protracted, with
key issues being the government's lack of fiscal discipline,
the need for parastatal reforms, and questions surrounding the
accounting for the country's oil revenues.  The January 1994
decision of the CFA countries to devalue the CFA franc was a
basis for an IMF stand-by arrangement.  Official creditors took
a relatively firm stand at the Paris Club, rescheduling
principal but requiring payment of previously deferred Paris
Club arrears over 12 months.  As of October 1994, the 
government had paid its first tranche of 30 percent of deferred
Paris Club arrears.  The London Club rescheduled loans for ten
years with a two-year grace period.

5.  Significant Barriers to U.S. Exports

    Decrees, pursuant to the IMF standby, have lifted
prohibitions against importing mineral water, household soap,
cooking oil, cement and sugar.  The prices paid for wheat and
rice are subject to government approval.  The wheat market is
under the control of a French firm, SETUCAF, which is principal
shareholder in Gabon's only flour mill and which has an
exclusive right to import wheat.  The rice market is more open,
with several Asian brands available.  U.S. rice has been
imported successfully, but faces a price disadvantage which
excludes it from the mass market.  Technical and other
standards tend to be drawn directly from the relevant French
standards.  Telecommunications equipment, for example, has in
the past been restricted to French brands due to a perception
in the Telecommunications Ministry that only French equipment
could be used in Gabon.  Perceptions such as these can be
sucessfully challenged, although factors such as language,
distance, culture, and historical ties to France remain as
practical barriers to U.S. trade.

    The Gabonese government has not imposed intrusive or
discriminatory measures on the investments of foreign firms,
which are the mainstay of the petroleum industry.  Gabon signed
the MIGA convention on April 15, 1994.

    The Gabonese government does not always adhere to
competitive bidding practices, and French technical advisers
are well placed to steer contracts to French firms.  In the
petroleum sector, the government has organized seven bidding
rounds for exploration leases since the the mid-1980's, but it
continues to sign contracts outside the rounds.  Off-round
deals are not reserved for French firms, however, and U.S.
firms have struck off-round exploration deals as well.

    Customs procedures are slow and cumbersome, particularly
since the introduction of a new computer system.  The burden,
however, affects all suppliers equally, regardless of

    The Gabonese government passed a revised budget law in June
of 1994 which incorporates many new standards and practices
relating to the country's financial activities, but the
implementation and effects of the new law have yet to be

6.  Export Subsidies Policies

    Gabon's exports are almost exclusively raw materials,
subject to export taxes rather than benefiting from subsidies. 
The 50 percent devaluation of the CFA franc, which occurred on
January 12, 1994 was in part a measure designed to make exports
more competitive.

7.  Protection of U.S. Intellectual Property

    Gabon is a member of the World Intellectual Property
Organization (WIPO) and several international intellectual
property rights conventions including the Berne Convention for
Protection of Literary and Artistic Works, the Paris Convention
for the Protection of Industrial Property and the Patent
Cooperation Treaty.  However, the Gabonese governmemt is not
active in the GATT or in other international trade fora and has
not taken a position on the intellectual property aspects of
the Uruguay Round.  Largely for lack of enforcement capability,
the government turns a blind eye on trademark violations.  For
example, U.S. ethnic cosmetic brands are sought after in Gabon,
but many of those available are in fact "remanufactured" (i.e.,
diluted) versions which transit Nigeria en route to Gabon.

8.  Worker Rights

    a.  The Right of Association

    Since 1990 reforms ended the single party political system
in Gabon, the Gabonese Union Confederation (COSYGA) no longer
has an exclusive right to represent workers.  Unions throughout
the economy have proliferated; in some cases two or more unions
compete for members in the same industry.  In addition, a
second trade union confederation, the Gabonese Confederation of
Free Unions (CGSL) now competes with COSYGA and has made
significant inroads as a collective bargainer for industrial

    b.  The Right to Organize and Bargain Collectively

    With the promulgation of the Constitution of 1991 the right
of collective bargaining was confirmed.  Before its formal
passage, Gabonese workers had begun to bargain with management
outside the COSYGA framework as early as mid-1990.

    c.  Prohibition of Forced or Compulsory Labor

    The Constitution of 1991 guarantees the right to
employment.  The Labor Code of 1978 forbids forced labor. 
However, credible sources report cases of prisioners, mostly
African expatriates, being forced to provide unpaid labor.

    d.  Minimum Age of Employment of Children

    The Labor Code of 1978 sets a minimum age of sixteen years
for employment.  UNICEF and other organizations have reported
instances of abuse of children as domestic or agricultural
help.  Non-Gabonese children are most at risk.

    e.  Acceptable Conditions of Work

    Conditions of work in much of the formal sector in Gabon
are reasonably good.  Health and safety standards are in place,
but not always observed; it is not uncommon to see workers
without hardhats or protective footwear in some industrial
plants.  Most of the firms operating production facilities in
Gabon are subsidiaries of, or are otherwise associated with, 
European or U.S. companies and tend to follow European or U.S.
standards.  Conditions in the informal sector and in Gabonese
SMBs are less uniform and less favorable for the workers.  The
Gabonese authorities do not exercise effective monitoring of
working conditions, primarily for lack of enforcement

    f.  Rights in Sectors with U.S. Investment

    U.S. investment is almost exclusively in the petroleum
sector.  Worker rights, working conditions, and adherence to
safety standards are generally better in U.S. firms than
elsewhere in the economy.

  Extent of U.S. Investment in Selected Industries.--U.S. Direct
Investment Position Abroad on an Historical Cost Basis--1993

                    (Millions of U.S. dollars)
              Category                          Amount          

Petroleum                                             177
Total Manufacturing                                     3
  Food & Kindred Products                   0
  Chemicals and Allied Products             3
  Metals, Primary & Fabricated              0
  Machinery, except Electrical              0
  Electric & Electronic Equipment           0
  Transportation Equipment                  0
  Other Manufacturing                       0
Wholesale Trade                                        -1
Banking                                                 5
Finance/Insurance/Real Estate                           0
Services                                                0
Other Industries                                        0
TOTAL ALL INDUSTRIES                                  184      

Source: U.S. Department of Commerce, Bureau of Economic


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