Andorra is a small landlocked country in southwestern Europe, located in the eastern Pyrenees mountains and bordered by Spain and France. It is the sixth smallest nation in Europe having an area of 468 km2 (181 sq mi) and an estimated population of 84,082 in 2009. Its capital, Andorra la Vella, is the highest capital city in Europe, being at an elevation of 1023 metres. The official language is Catalan, although Spanish, Portuguese, and French are also commonly spoken. The Principality was formed in 1278. The role of monarch is exercised jointly by the two co-princes, the President of the French Republic and the Bishop of Urgell, Catalonia.
Andorra is a prosperous country mainly because of its tourism industry, which services an estimated 10.2 million visitors annually, and also because of its status as a tax haven. It is not a member of the European Union, but the euro is the de facto currency. The people of Andorra have the 4th highest human life expectancy in the world – 82 years.
Tourism, the mainstay of Andorra’s tiny, well-to-do economy, accounts for roughly 80% of GDP. An estimated 10.2 million tourists visit annually, attracted by Andorra’s duty-free status and by its summer and winter resorts. Andorra’s relative advantage has recently eroded as the economies of adjoining France and Spain have been opened up, providing broader availability of goods and lower tariffs.
The banking sector, with its tax haven status, also contributes substantially to the economy. Agricultural production is limited – only 2% of the land is arable – and most food has to be imported. Some tobacco is grown locally. The principal livestock activity is domestic sheep raising. Manufacturing output consists mainly of cigarettes, cigars, and furniture. Andorra’s natural resources include hydroelectric power, mineral water, timber, iron ore, and lead. Andorra has one of the world’s lowest unemployment rates, with the statistics showing 2.9% unemployment within the country.
