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Marshall Islands Economy

    Economy—overview: US Government assistance is the mainstay of this tiny island economy. Agricultural production is concentrated on small farms, and the most important commercial crops are coconuts, tomatoes, melons, and breadfruit. Small-scale industry is limited to handicrafts, fish processing, and copra. The tourist industry, now a small source of foreign exchange employing less than 10% of the labor force, remains the best hope for future added income. The islands have few natural resources, and imports far exceed exports. Under the terms of the Compact of Free Association, the US provides roughly $65 million in annual aid, equal to about 70% of GDP. Negotiations will get underway in 1999 for an extended agreement. Government downsizing, drought, a drop in construction, and the decline in tourism and foreign investment due to the Asian financial difficulties have caused GDP to fall in 1996-98.

    GDP: purchasing power parity—$91 million (1998 est.)

    GDP—real growth rate: -5% (1998 est.)

    GDP—per capita: purchasing power parity—$1,450 (1998 est.)

    GDP—composition by sector:
    agriculture: 15%
    industry: 13%
    services: 72% (1995)

    Population below poverty line: NA%

    Household income or consumption by percentage share:
    lowest 10%: NA%
    highest 10%: NA%

    Inflation rate (consumer prices): 5% (1997)

    Labor force: NA

    Labor force—by occupation: NA

    Unemployment rate: 16% (1991 est.)

    Budget:
    revenues: $80.1 million
    expenditures: $77.4 million, including capital expenditures of $19.5 million (FY95/96 est.)

    Industries: copra, fish, tourism, craft items from shell, wood, and pearls, offshore banking (embryonic)

    Industrial production growth rate: NA%

    Electricity—production: 57 million kWh (1994)

    Electricity—production by source:
    fossil fuel: NA%
    hydro: NA%
    nuclear: NA%
    other: NA%

    Electricity—consumption: 57 million kWh (1994)

    Electricity—exports: 0 kWh (1994)

    Electricity—imports: 0 kWh (1994)

    Agriculture—products: coconuts, cacao, taro, breadfruit, fruits; pigs, chickens

    Exports: $17.5 million (f.o.b., 1996 est.)

    Exports—commodities: fish, coconut oil, fish, trochus shells

    Exports—partners: US, Japan, Australia

    Imports: $71.8 million (c.i.f., 1996 est.)

    Imports—commodities: foodstuffs, machinery and equipment, fuels, beverages and tobacco

    Imports—partners: US, Japan, Australia, NZ

    Debt—external: $125 million (FY96/97 est.)

    Economic aid—recipient: $NA; note—approximately $65 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

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)