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Background Information about Marshall Islands

Author: IFAD


Economic Background
The Marshall Islands has a similar level of income as Kiribati estimated at USD 160 million. The World Bank (2012) shows that its GDP increased by an average annual rate of 2% in the last ten years and in 2011, it is estimated to have expanded by about 5%. Per capita GDP was just over USD 3,100 and per capita GNI was USD 3,910 in 2011. The World Bank (2012) suggests that close to 5,5000 people inhabited this group of small atoll islands. The land area is 180 square km. Arable land accounts for 11% equally divided between permanent crops and other land uses. The highest point is 10m above sea level. UNFPA reports that average growth rate of population is 1.9% for the last ten years, a decline from 4.3% of the 1980s. The primary reason for this dynamics is net out-migration of 2.3% per year. Services comprised 73% of GDP in 2010 followed by 15% in agriculture, while the manufacturing share was small and comparable to that of the FSM. The Marshallese and their mixed descents account for about 98% of total population. The Marshall Islands have been receiving Compact Aid from and enjoy unrestricted travel to the USA. Close to 50% of the population live in Majuro.

Baseline Poverty Analysis
There are limited data on national and rural poverty for the Marshall Islands, but poverty is considered to be an important issue as national unemployment rate is estimated at 36%, IFAD (2011). The MDG report (2012) provides some anecdotal evidences and indicates that households are facing difficulties in meeting daily expenses due to high food and fuel prices and low growth. Although the economy has recently recovered strongly, much of this growth was concentrated in a small number of sectors where rural sector involvement is limited. Apart from kinship ties that supports through remittances and short-term lending, there are no real social safety nets for the majority of rural population. Consequently, there have been rising levels of unemployment and financial hardships in many of the outer islands. Access to basic services is limited. The report shows that only 87% of the rural children aged 6-12 years attend school. Schooling is compulsory but the cost is generally met by the parents. Highs school drop-out rates is a big problem. Youth comprises 23% of population and the high dropout rates, together with limited employment opportunities is problematic. However, they seem to find that migration to the USA an easier option to evade poverty and hardship – for the others, it is remittances and subsistence agriculture.

There is no evidence of gender disparity in education but only a few women are in business. The share of women in parliament remains at 3% since 1990s. Only 36% of women are engaged in non-agricultural activities (females account for 33% of all activity involved in agriculture).

Agriculture and Rural Development
With limited land and unsuitable topography, the Marshall Island’s agriculture comprises selected root crops, fruits, vegetables and livestock, but marine based activities are the dominant sub-sector. It is primarily subsistence but commercial agriculture includes handicraft, fisheries and black pearl. Copra and fishing remains the most important source of incomes for over half of the population living in rural areas. IFAD (2012) shows that while production of fish has slightly dropped oil crops picked-up in 2009 relative to 2004. Coconut (production and values) picked up sharply in 2009 when compared with 2004. The land is controlled by a few large landowners leading to the majority of rural households being landless but land remains contestable in the formal market. Access to water for agriculture seems to be a problem as the primary source of fresh water is rain which (due to the low elevation of the atolls and islands) disperses into saltwater. In some locations freshwater can be accessed with wells, IFAD (2011). There is a limited sale of outer island atoll crops (except for copra and fish) in the urban centres due to high transportation costs, intermittent supplies and lack of physical market place. Most of these households keep a few pigs and local chickens. An IFAD (2011) states that almost 100% of the livestock demand is met by imports as local production is undermined by high feed costs. Fishing is an important livelihood strategy and export product. Exports were USD 27 million but imports amounted to USD 120 million in 2010, World Bank (2012).

Investing in the Rural Poor
Marshall Islands: Investing in the Rural Poor, IFAD's Rural sector performance assessment (RSP).  This publication may be found here.

Rural Development Indicators
Composite data about the Marshall Islands may be found here.

Language:  English (United Kingdom)
Development Themes: Agriculture Food Security & Nutrition
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