Economy of Marshall Islands

Exports and Imports

The Marshall Islands primarily exports fish, coconuts, and handicrafts. In terms of imports, the country relies heavily on foodstuffs, manufactured goods, machinery, and fuels. In recent data, exports were valued at approximately $41 million, while imports totaled around $130 million, highlighting a trade deficit primarily financed through foreign aid and grants.

Infrastructure

Infrastructure in the Marshall Islands is limited and often vulnerable to natural disasters such as typhoons. The road network is relatively basic, with paved roads on major islands like Majuro and Kwajalein, but many outer islands lack paved roads and reliable transport links, impacting economic development and connectivity.

Balance of Trade

The Marshall Islands faces a significant trade deficit, with exports accounting for about 24% of GDP and imports around 75% of GDP. This imbalance underscores the country's reliance on external sources for goods and its vulnerability to fluctuations in global commodity prices and aid inflows.

Fiscal Policy

The Marshall Islands' fiscal policy is aimed at maintaining economic stability and promoting development through prudent spending and external aid management. Tax revenue as a percentage of GDP is relatively low, with the government relying heavily on grants and assistance from international partners to finance its budgetary needs.

Monetary Policy

The Marshall Islands, as part of the Compact of Free Association with the United States, uses the US dollar as its official currency. Monetary policy is therefore influenced by decisions of the US Federal Reserve, with limited scope for independent actions by the Marshall Islands' authorities.

Trade Agreements

As a small island nation, the Marshall Islands does not participate in major trade agreements like NAFTA. However, it benefits from the Compact of Free Association with the United States, which provides financial assistance and grants access to US markets for certain goods, bolstering its economy.

Environmental Regulations

Environmental regulations in the Marshall Islands focus on preserving marine resources and combating climate change impacts such as sea-level rise and coral bleaching. The government has implemented policies to protect its fragile ecosystem while balancing economic development, although enforcement and capacity remain ongoing challenges.