Economy of the Marshall Islands
.png) Copra making on the islands in 1932 | |
| Statistics | |
|---|---|
| GDP | |
GDP growth |
|
GDP per capita | |
| 0.781% (2018 est.)[1] | |
All values, unless otherwise stated, are in US dollars. | |
The government of the Marshall Islands is the largest employer, employing 30.6% of the work force, down by 3.4% since 1988. GDP is derived mainly from payments made by the United States under the terms of the amended Compact of Free Association. Direct U.S. aid accounted for 60% of the Marshall Islands' $90 million budget.
The main economic activities in the Marshall Islands are copra production and fisheries.[2] Under the terms of the Compact of Free Association, Marshallese citizens can travel and work in the United States without visas, which has contributed to more than a 22% population decline over the period 2000–2021.[2]
The Marshall Islands has no central bank.[2] The official currency of the Marshall Islands is the US Dollar.[2]
Subsistence economy
[edit]The subsistence economy consists of fishing and breadfruit, banana, taro, and pandanus cultivation. On the outer islands, production of copra and handicrafts provide cash income. The modern service-oriented economy is located in Majuro and Ebeye. It is sustained by government expenditures and the U.S. Army installation at Kwajalein Atoll. The airfield there also serves as a second national hub for international flights.
Modern economy
[edit]The modern sector consists of wholesale and retail trade; restaurants; banking and insurance; offshore companies registration; construction, repair, and professional services; and copra processing. Company formation in the Marshall Islands is available for residents and non-residents. Non-residents enjoy privacy benefits and zero local taxes. Copra cake and oil are by far the nation's largest exports. A tuna processing plant employs 300 workers, mostly women, at $1.50 per hour. Copra production, the most important single commercial activity for the past 100 years, now depends on government subsidies. The subsidies, more a social policy than an economic strategy, help reduce migration from outer atolls to densely populated Majuro and Ebeye.
Marine resources, including fishing, aquaculture, tourism development, and agriculture, are top government development priorities. The Marshall Islands sells fishing rights to other nations as a source of income. In recent years, the Marshall Islands has begun to offer ship registrations under the Marshall Islands flag. As a small nation, the Marshall Islands must import a wide variety of goods, including foodstuffs, consumer goods, machinery, and petroleum products.
Marshall Islands has signed a bilateral trade agreement with Taiwan in 2019, this agreement has been approved in 2023 and will take effect at a future date.[3]
Coconut oil
[edit]Power authorities, private companies, and entrepreneurs are experimenting with coconut oil as an alternative to diesel fuel for vehicles, power generators, and ships. Coconut trees abound in the Pacific's tropical islands. One liter of oil can be produced from the copra of 6–10 coconuts.[4]
Digital currency
[edit]In February 2018, the Marshallese government enacted the Sovereign Currency Act of 2018 to develop a national digital currency, the Marshallese Sovereign (SOV), that would reduce the country's dependence on the U.S. dollar.[5][6] The SOV plan prompted a vote of no confidence in President Hilda Heine, who was in favour of the scheme, in November 2018,[7] which failed when parliament deadlocked on the question.[8]
The SOV is intended to serve as a second legal tender for the Marshall Islands, alongside the U.S. dollar; however, the International Monetary Fund has stated that it does not meet the definition of a central bank digital currency.[9] The IMF also raised concerns about macroeconomic and financial integrity risks associated with the digital currency.[10] Despite the objections of the IMF, the U.S. Treasury Department, and banks, the Marshallese government has continued to work toward the development of the SOV.[11] The country is using Algorand open-source blockchain technology for the SOV ledger.[12]
Gross domestic product
[edit]GDP: purchasing power parity - $150 million (2011 est.)
GDP - real growth rate: 3% (2011 est.)
GDP - per capita: purchasing power parity - $2 500 (2011 est.)
GDP - composition by sector:
agriculture:
22%
industry:
18%
services:
60% (2008)
The islands have few natural resources, and their imports far exceed exports. According to the CIA, the value of exports in 2013 was approximately $53.7 million while estimated imports were $133.7 million. Agricultural products include coconuts, tomatoes, melons, taro, breadfruit, fruits, pigs and chickens. Industry is made up of the production of copra and craft items, tuna processing and tourism. The CIA estimates that the GDP in 2016 was an estimated $180 million, with a real growth rate of 1.7% while the GDP per capita was $3,300.[13]
Marshall Island productivity
[edit]Population below poverty line: NA%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices): 5% (2007)
Labor force: NA
Labor force - by occupation: agriculture 48%, industry 12%, services 40% (2008)
Unemployment rate: 8% (2011 est.)
Budget:
revenues:
$169.5 million
expenditures:
$112.1 million, including capital expenditures of $19.5 million (FY08/09 est.)
Industries: copra, fish, tourism, craft items from shell, wood, and pearls, offshore banking (embryonic)
Industrial production growth rate: NA%
Electricity - production: 114 GWh (2008)
Electricity - production by source:
fossil fuel:
NA%
hydro:
NA%
nuclear:
NA%
other:
NA%
Electricity - consumption: 57 GWh (1994)
Electricity - exports: 0 kWh (1994)
Electricity - imports: 0 kWh (1994)
Agriculture - products: coconuts, cacao, taro, breadfruit, fruits; pigs, chickens
Exports: $132 million (f.o.b., 2008 est.)
Exports - commodities: fish, coconut oil, trochus shells
Exports - partners: United States, Japan, Australia, New Zealand
Imports: $125 million (f.o.b., 2008 est.)
Imports - commodities: foodstuffs, machinery and equipment, fuels, beverages and tobacco
Imports - partners: United States, Japan, Australia, New Zealand, Guam, Singapore
Debt - external: $68 million (2008 est.)
Economic aid - recipient: approximately $40 million annually from the US
Currency: 1 United States dollar (US$) = 100 cents
Exchange rates: US currency is used
Fiscal year: 1 October - 30 September
See also
[edit]References
[edit]- ^ a b c d e f "World Economic Outlook Database, October 2019". IMF.org. International Monetary Fund. Retrieved 20 October 2019.
- ^ a b c d "Republic of the Marshall Islands: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of the Marshall Islands". IMF. Retrieved 26 December 2023.
- ^ "ECA/FTA簽訂夥伴". 臺灣ECAFTA總入口網站. Bureau of Foreign Trade. Retrieved 11 June 2023.
- ^ "AFP: Pacific Islands look to coconut power to fuel future growth". Agence France-Presse. 13 September 2007. Archived from the original on 13 January 2008. Retrieved 28 May 2019.
- ^ Chavez-Dreyfuss, Gertrude (28 February 2018). "Marshall Islands to issue own sovereign cryptocurrency". Reuters. Retrieved 29 September 2018.
- ^ Keane, Jonathan (23 April 2018). "Inside the Marshall Islands' plans to launch its own legal tender cryptocurrency". The Next Web. Retrieved 29 September 2018.
- ^ Ainge Roy, Eleanor (5 November 2018). "Plans for digital currency spark political crisis in Marshall Islands". The Guardian. Retrieved 28 February 2022.
- ^ Johnson, Giff; Majuro, in (12 November 2018). "Marshall Islands president narrowly survives no confidence vote". Radio New Zealand International. Retrieved 28 February 2022.
- ^ Hunter, Leni; Schwarz, Nadine; Pampolina, Jonathan (2018). IMF Country Report No. 18/271 -- Republic of the Marshall Islands (PDF) (Technical report). Washington, D.C.: International Monetary Fund. p. 10. Retrieved 28 February 2022.
- ^ Hunter, Schwarz & Pampolina 2018, pp. 12–14.
- ^ Light, Joe (14 December 2018). "Why the Marshall Islands Is Trying to Launch a Cryptocurrency". Bloomberg Business. New York City, New York. Retrieved 28 February 2022.
- ^ Giordano, Alberto (9 April 2020). "Marshall Islands Sets The Pace For Digital Currency Issuance". Global Finance Magazine. New York City, New York. Retrieved 28 February 2022.
- ^ "Marshall Islands Economy 2019, CIA World Factbook".