Neretas Novads Travel on In the 20th century, many Andorran farmers switched to growing tobacco which proved to be more profitable. In the 1990s, the economy of Andorra greatly benefited from a customsunion agreement with the EUROPEAN UNION (EU) that permitted it to sell duty-free items that it combined with minimal sales taxes. Because of the appeal of shopping (prices are as much as 40 percent lower than in neighboring countries) and natural scenery, the primary basis of Andorra's economy is tourism, accounting for 80 percent of employment and GROSS DOMESTIC PRODUCT (GDP). Andorra also has had a strong banking sector.
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Investors have been attracted by its strict privacy laws, but these practices have come under criticism from foreign agencies seeking to crack down on under-regulated tax havens. The country is so small (468 square miles) that economist Simon KUZNETS once held it up as an example of why scholars should not use nation states as the primary units of economic research. BIBLIOGRAPHY.
Neretas Novads Travel 2016.