Few people
know much about microstates, though millions visit them each year.
The European mictostates, all have mature service economies, and most
have have very little heavy industry or agriculture.
Economically,
the microstates are urbanized and rely heavily on exporting and
tourism. Although originally the microstates had poor agricultural
economies, they now have “mature service economies, and most have
very little heavy industry or agriculture.” The small population of
the microstates pushes them to look toward exporting. The tiny
nations of Europe are so small that their native populations usually
do not provide a market large enough for their own industries'
products.When the world hit the era of modernization, the microstates
each found one industry to specialize in, which transformed them into
modern countries.
Consequently
their major products are usually their major exports as well. For
example, Liechtenstein, Luxembourg and Malta export specialty
machinery. Thus Luxembourgs' steel industry supplies the world's
builders with extra strong iron. Malta and Monaco export glassware.
Andorra exports tobacco and furniture. Liechtenstein exports dental
products (especially false teeth). San Marino exports building stone
and food. As to Monaco, the countries main export products are
cosmetics pharmaceuticals. Only Vatican City is prohibited by law
from exporting any goods. The Vatican is too small to manufacture
anything on its own. Anything that could be exported, would be"transshipped" imported goods from Italy and since goods
coming into the Vatican from Italy are not taxed, but goods sold in
Italy are , reselling them could easily be profitable. Precisely to
prevent this, when Italy signed the treaty establishing the Vatican,
all exportation was prohibited except by special permission. Needless
to say, Vatican City must import all products consumed there.
Similarly, except for the few products, that they can export, all the
other microstates, import the rest of the items they consume.
It should be
noted that all these states are currently attempting to diversify
their exports so that they are less dependent on one export.
Tourism
naturally became a strong industry for the states; however, most
people only visit the microstates for a day and leave in the evening
so it is a different type of tourism than in the rest of Europe. To
encourage emigrating companies, the microstates offer tax breaks and
low.
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