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Cabo Verde has a market economic system in which the prices of goods and services are determined in a free price system. Cabo Verde is a member of the Economic Community of West African States (ECOWAS).

Cape Verde is considered a developing country, and is included on the list of the United Nations Small Island Developing States. In 2007 the United Nations graduated Cape Verde from the category of Least Developed Countries, only the second time this has happened to a country.