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Asia and Oceania
Republic of Marshall Islands |
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Country information
Economy
Basic economic facts
GDP: US$149 million (2007)
GDP per capita: US$2,851 (2007)
GDP real growth: 25% (2007)
Inflation: 4.7% (2007)
Major industries: Copra, tuna processing, tourism, craft items from seashells, wood, pearls
Major trading partners: Japan, United States, New Zealand, Australia, China, Taiwan
Exchange rate: Uses US dollar
Unemployment 36% (2006 est.)
Government is the largest employer, employing 64% of the salaried work force. GDP is derived mainly from Compact transfer payments from the United States. Under the 2003 amended Compact of Free Association, the US has agreed to give the Marshall Islands and the Federated States of Micronesia jointly some US$3.5 billion in economic and service aid over the next twenty years. The aid formula is for decreasing US assistance and increasing emphasis on private sector and foreign investment. In 2003, direct US aid accounted for 55% of the fiscal budget.
The Marshall Islands is still a mainly copra-based subsistence economy. Copra and coconut oil constitute 90% of exports. Yellowfin tuna are exported fresh for the Japanese sushi market. The tourism industry, a small but useful source of foreign exchange, now employs 10% of the labour force but remains the best hope for future added income. There is a chronic trade imbalance in favour of the United States and Japan although new partners include Australia and China (2004). The country’s imports far exceed their exports. Great potential lies in marine resources and seabed mineral deposits. The Marshall Islands has a 750,000 square mile Exclusive Economic Zone rich in skipjack and yellowfin tuna. The Asian Development Bank has devoted US$100,000 to assessing the island's fish resources. A US funded study is looking into the feasibility of building a tuna trans-shipment depot in Majuro. A service-oriented economy is located in Majuro and Ebeye. It is sustained by government expenditure and the US Army installation at Kwajalein Atoll. The airfield there also serves as a second national hub for international flights.