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>> Political economy
- The Republic of The Marshall Islands comprise two archipelago island chains of 30 atolls and 1152 islands - spread across 750,000 square miles of ocean
- The capital city is Majuro - an oval shaped atoll comprising 3 islands of Delap, Uliga and Darrit islands (known as D-U-D)
- 68% of the population live in the urban centres of Majuro and Ebeye (one of the most urbanized populations in the Pacific)
- The current population is almost 51,000 - which represents a recent sudden decrease in the population growth rate (which was expected to be 60,000 by now)
- Majuro is 2.5 hrs ahead of Adelaide time
- Daily temperatures average 27 degrees
- Majuro's wet season is September through November
- Historically the Marshalls were never united under one chief. Local chiefs had absolute authority.
- There was little European contact until traders and whalers came in the early 1800s - only to be met by violent attacks by the Marshallese
- Germany annexed the Marshalls in 1885 but until a formal German administration was set up in 1906 the islands were run by a group of powerful German trading companies
- The Japanese took control in 1914 and developed large bases throughout the Marshalls
- The US captured Kwajelein and Majuro atolls in 1944 and used these as bases for their counterattack on the Japanese
- The Islands were governed under U.S. administration as part of the UN trust territory of the Pacific islands for four decades from around 1947
- U.S. nuclear testing occurred in the region between 1948 and 1958. In all there were 67 nuclear-weapons tests at Bikini and Enewetak
- The Republic of The Marshall Islands gained independence in 1986 establishing a Compact of Free Association with the U.S.
- in the view of the CIA, U.S. government assistance is the mainstay of the economy (although ADB loans are actually of equal importance)
- however from another perspective it could be said that the government sector dominates the economy amounting to almost half of formal employment
- The Republic of The Marshall Islands has a narrow production base consisting primarily of coconut harvesting and processing, subsistence farming, and deep sea fishing.
- GDP amounted to $105 million in 1998 comprising 15% in agriculture, 13% in industry, and 72% in services (1995) - supplemented by $65 million (or $32m?) U.S. aid
- agricultural production is concentrated on small farms - and the most important crops are coconuts, tomatoes, melons, and breadfruit
- small-scale industry is limited to handicrafts fish processing and copra
- the tourist industry is a small source of foreign exchange but employs less than 10 percent of the labour force
- the U.S. dollar is the local currency
- offshore banking (ie tax havens) is an embryonic industry
- fish and coconut oil are the main exports
- imports come mainly from the U.S. Japan and Australia
- there is a huge trade deficit (of approximately $30 million)
- the foreign debt amounted to $125 million in 1996/97
- the World Bank reported in 1996 that the government had exhausted its financial holdings and borrowing capacity
- the Marshallese population is Micronesian in ethnicity
- 43 percent of the population is below the age of 15 - however this is a significant drop from the 50 percent of the last census reflecting the migration of many youngMarshallese to the U.S.
- there has been a huge increase in numbers of Marshallese children adopted by American families (many young women go to Hawaii to have their children and then organize for their adoption)
- English is the official language. There are two major Marshallese dialects
- literacy rates are 100% for males and 88% for females
- the Marshallese are mostly Protestant Christians
- social development indicators lag behind those of other Pacific island countries despite the comparatively high per-capita income estimated at around US$1860 in 1996. A human poverty index of 18.7 places The Republic of The Marshall Islands in the mid range of Pacific poverty levels
- however the ADB claims that pervasive poverty has never been a major problem in The Republic of The Marshall Islands as a result of extended family ties and close relationships
- problems have also been identified as a result of rising unemployment - caused by school dropouts, unemployed youth and former civil servants retrenched during the downsizing of the government during the recent reform programs
- the low level of educational attainment is a major problem - caused by the lack of access to education in the outer islands and high dropout rates with only 3 of 100 students completing 12th grade. Up to 20 percent of elementary school age children do not attend school on a regular basis. The law requires compulsory education for children to 14 years. However of the government does not enforce this due to a lack of classrooms and teachers.
- environmental conditions are a major problem particularly in the major urban centers including overcrowding, dumping of debris and liquid waste, and major littering (no mention is made by the ADB of nuclear pollution!)
- a cholera outbreak occurred in 2000 on Ebeye
- life expectancy is currently 66 years
- the infant mortality rate is 40 deaths per 1000 (ie high)
- The Republic of The Marshall Islands is a predominantly matrilineal society in the inheritance of property and of traditional rank. Women therefore occupy positions of importance within the traditional system.
- however women continued to lag behind men in all areas of contemporary life.
- decision making in most aspects of life is made by the men .
- there are few women in senior levels of the government, only one in the parliament, and none in the cabinet.
- with high fertility and birthrates health of women is their most immediate problem.
- teenage pregnancies have been identified as a special problem
- the government has identified spousal abuse as common. Wife beating is not condoned and yet many cases go unreported.
- Child abuse is reported to be on the increase and is attributed to pressures on family life and traditional values arising from increased urbanization, two income households, and alcohol and illegal gambling
- Violence against women outside the family occurs and women in the urban centers are at risk by going out alone after dark
- Womens' groups are publicizing women's issues and attempting to create a greater awareness of the rights of women
- While women workers are very prevalent in the private sector many of them are in low-paying jobs with little hope of advancement
- The Republic of The Marshall Islands (RMI) has a single house Parliament - the Nitijela - with 33 members
- the RMI is divided into 24 municipalities - each with its own Mayor and at least one representative in the Nitijela.
- there are basically only 2 parties
- from the establishment of constitutional government in 1979 until 1999 The Republic of The Marshall Islands was governed by the Kabua party led by a significant chief Amata Kabua
- in November 1999 a dramatic political upheaval occurred and the opposition United Democratic Party gained control of the Nitijela
- the new President is now Mr Kessai Note - the first-time the President has been a commoner
- President Kessai Note has had a bumpy ride although his government now seems to be reasonably stable. The President has strong affiliations with the Rev. Sun Myung Moon and his Unification Church and this has caused his popularity ratings to suffer and led to heavy criticism from church groups and even one of the President's own cabinet ministers - who called Moon 'a fascist and a liar'.
- Anjain-Maddison is currently the only woman to serve in the parliament
- the Marshallese fiscal year is from 1st October to 31 September
- since joining the ADB in 1990 the Marshallese have received 11 loans totalling US$52M
- in the early-mid 1990s it appears that the former government resisted the influence of the ADB
- in the early 1990s capital expenditures expanded considerably through increased spending on education and infrastructure and other public investment projects (in the US/ADB view the Marshallese badly overspent their US Compact money - sinking it into 'poor business investments'))
- by the mid-1990s external debt stood at 138 percent of GDP (the government had borrowed against future US Compact payments)
- in December 1995 a Consultative Group Meeting of donors (ie the US and the ADB?) was held under the sponsorship of the ADB which endorsed a Policy Reform Program (PRP) of comprehensive reform program aimed at restoring economic stability, downsizing the public sector and promoting private sector growth
- the PRP applied a series of conditions in order for the ADB Program Loan to be released - including a 25% reduction in civil service staff, a wage freeze, the introduction of a performance based budgeting system, a broadbased consumption tax, and measures to privatise public enterprises
- although the budget deficit was dramatically reduced, GDP growth also declined from 4% to -2.5%. In its December 1999 report the ADB admitted that declines in output had occurred in all sectors of the economy caused by cuts in public expenditure and employment made under the PRP
- the ADB also reported that downsizing is likely to increase the number of poor households in the urban centres and will therefore also lead to a decline of remittances to the outer islands
- however donor organizations remained very dissatisfied with progress on the other goals that had been set for the government
- the election of the present government in 1999 seems to have been warmly welcomed by the US and the ADB and has resulted in a policy shift towards a reestablishment of a close working relationship with the ADB and discussions about the renewal of the US Compact
- a new loan of nearly $12 million was negotiated together with a program of long-range policy reforms
-
the stated aims of the ADB's operational strategy are to:
- strengthen fiscal management
- improve living standards by promoting broad based growth and access to essential services - special attention to be given to the needs of women and the needs of the outer islands
- improve the investment climate and strengthen the private sector
-
private sector development is supported by the ADB's most
recent Public Sector Reform Program which aims at
- further downsizing the civil service
- privatisation (esp of the Kwajalein Joint Utility Resource and the National Telecommunication Authority)
- tax reforms (consumption tax)
- improving the environment for foreign investment
- pending in the finalization of a comprehensive Pacific island economic report in 2000, the ADB assistance program for 2001 to 2003 remained tentative - although estimated to be about $21m
- a major problem of governance of concern to the ADB is the lack of qualified and suitable mid-level and senior staff in line ministries. As a result, decision making remains limited to the ministerial level and timely decisions cannot be made.
- similarly the ADB believes that adequate reporting and control of government finance needs to be introduced. The ADB has called for proper audits and disclosure of findings as well as clearly stated rules and regulations
- There is no legislation concerning collective bargaining or trade union organization
- there is a minimum wage and other employment legislation
- there is no law setting a minimum age for employment of children and many children assisted families in fishing, agriculture and other small scale domestic enterprises
- in September 1999 the nation's first strike occurred when hospital workers organized in protest at political interference in the hiring and firing of hospital administrators and employees
- Fishing and fish processing seems to be expanding and 322 new jobs were created in the new Majoro fish factory in November 1999 (80% of the jobs create went to women)
- U.S. financial assistance is provided under the formal Compact with the national government
- the government currently receives U.S. assistance estimated at about US$35 million per annum
- the financial arrangements and the compact were to be revised in October 2001 however the compact was extended for two years until October 2003
- the U.S. compact provides the Marshallese with the right to work in and emigrate to the U.S. There has been a steady outflow of citizens during the 1990s for this reason including some of the most qualified people
- the Marshallese are still seeking adequate compensation from the U.S. for the nuclear testing program and they are still owed nearly $30 million in personal injury awards and over $1 billion in land damages already awarded by the Nuclear Claims tribunal. More claims are being prepared
- the previous government had resisted U.S. oversight of funding provided under the Compact. However the new government has been more accepting of U.S. oversight and has allowed a very critical U.S. audit of the use of Compact funds
- Kwajalein remains a key site for the development of U.S. missile testing and a very extensive US base with space tracking technology exists there. Almost 3000 US citizens live there
- Taiwan seems to have established some sort of a relationship with the Marshallese as a donor country - particularly with a focus on the fishing industry.
- Globalization and the
Island Economies of the South Pacific
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This paper from the World Instiute for Economic Development examines the impact of increasing integration of the island economies of the South Pacific into expanding international markets