ANDORRA

NATURAL ENVIRONMENT: Andorra occupies a region of gorges and valleys in the eastern Pyrenees. The country is almost completely encircled by high mountains. The Coma Pedrosa, which rises to 2,946 m , is Andorra’s highest peak. Over the centuries, settlers have cleared much of Andorra’s original alpine forest cover, including birch, pine, and fir, creating pastures in valleys and on the slopes. Overgrazing by livestock has caused soil erosion in some mountain meadows. Andorra is drained by the Valira River. Many streams meet to form the Valira, which flows south into Spain. Waterpower is one of Andorra’s few significant natural resources, and it permits the country to produce nearly half of its electricity needs. Andorra has small deposits of iron and lead, but they have not been mined extensively because of the high costs of transportation. Some marble is also quarried.
ECONOMY: Before World War II, Andorra’s economy was based largely on farming and the processing of tobacco and timber (see Forestry). Tourism has boomed since the 1950s and now dominates the principality’s economic life. Andorra receives more than 3 million tourists and more than 8 million excursionists every year. Visitors are drawn by the excellent facilities for winter sports, the sunny alpine climate, the old churches and quaint towns, and the availability of a wide assortment of duty-free goods. Andorra also collects revenues on the sales of its distinctive postage stamps, which are purchased by tourists and collectors. Financial services emerged as an important facet of Andorra’s economy in the 1990s, aided by strict banking secrecy laws and low business taxes. Because only about 4 percent of Andorra’s land is suitable for cultivation, most food is imported. Nevertheless, farming—especially sheep and cattle grazing and the growing of tobacco—remains a visible feature of Andorran life and culture. Andorra manufactures cigarettes and cigars, and timber harvested from Andorra’s slopes is used to produce furniture. Although Andorra is not a member of the European Union (EU), in 1990 it signed a customs union with the EU that regulates the duty-free allowances permitted visitors to the country. In 2002 Andorra adopted the EU’s common currency, the euro. Previously, Andorra had used the Spanish peseta and the French franc, both of which were also replaced by the euro. Andorra has no railroad or airport but possesses an excellent road system. Even so, heavy traffic frequently clogs the streets of Andorra’s towns. Public television and radio broadcasting services are provided by Andorra Televisió and Radio Nacional d’Andorra. Andorrans also have access to broadcasts from France and Spain. There are two major daily newspapers, el Periodicó and Diari d’Andorra.