The Marshall Islands is an island country and an associate state of the United States. It is located in the Pacific Ocean and is among the Micronesian Islands of Oceania. It covers about 70.05 square miles and has a population of roughly 53,200. About 73% of the population lives in the urban environment, of whom 52% live in the capital city Majuro. The GDP of the Marshall Islands is about 210 million dollars, while the per capita income is about $3,500. Since the beginning of the decade, the economy has been growing at an average rate of between 2.3% and 2.5% annually. The largest industries in the Marshall Islands are agriculture, fishing, tourism, shipping, and finance.
The economy of the state is closely linked to that of the US, and the latter also controls the island’s defense and security. The official currency is the United States dollar, but in 2018, the state recognized cryptocurrencies as a trading currency and became the first country to embrace the digital economy fully. Foreign aid accounts for 70% of the budget with the United States donating US$62.7 under the Compact of Free Association (COFA) agreement. Both countries will jointly find a trust fund that will provide an income stream for the citizens of the island beyond 2024. The aid is directed towards the development of the private and public sectors, infrastructure, education healthcare, and environment. The Marshall Islands seeks to establish an independent economy by attracting foreign investments, but the International Monetary Fund has warned the country against straining the financial relationship with the United States to avoid the risk of being cut off from the global financial system. Unemployment estimates suggest that about a third of the population and 60% of the youth are unemployed despite the country being classified an upper middle-income state by the World Bank.
Industries of the Marshall Islands
The Marshall Islands is a preferred choice for the flag of convenience for vessels because of the country’s good reputations in the shipping industry. As of 2018, the country’s ship registry was only overshadowed by Panama. The state laws do not require vessels flying the Marshallese flag be owned by citizens or corporations but must adhere to the maritime laws and regulations of the state. This policy allows ships registered in the country to exchange goods within the maritime boundaries and thus enable the Marshall Islands to export what it does not produce such as crude oil.
Agricultural production in the country is mostly subsistence because of lack of land to establish large plantations. Banana, coconut, breadfruit, arrowroot, and yam are the primary foods produced. Copra is the most significant commercial crop. Pigs and chickens are the most commonly kept livestock.
The capital city Majuro is among the busiest tuna shipment port in the world, registering about 710 shipments amounting to approximately 450,000 tons. The city is also a major processing center for fish with the Pan Pacific Foods Company exporting fish to a number of countries including the United States. The Marshall Islands grant’s fishing licenses to foreign fleets as the marine industry in the country is still underdeveloped.