This Selected Issues paper outlines economic developments in the Republic of the Marshall Islands (RMI) since independence in 1986, focusing on the challenges posed by dependence on foreign grants, and progress toward achieving budgetary self-reliance. Like most other Pacific islands, the RMI faces a variety of geographical constraints, including limited land area, poor soil, the dispersion of the islands, and the remoteness from major markets. The public sector plays a dominant role in the economy, backed by external assistance. The private economy remains underdeveloped, primarily providing services to the government.

The strategy that has the best chance of allowing the Republic of Marshall Islands (RMI) to achieve fiscal sustainability after FY2023 involves substantial fiscal consolidation. The alternative (policy action) scenario involves a substantial fiscal adjustment starting in FY2009. Projections show that this strategy can succeed in achieving budgetary self-sufficiency. Fiscal consolidation will be difficult, and will have to be accompanied by structural reforms to improve real growth. Substantial fiscal consolidation in the short term is necessary to achieve budgetary self-sufficiency after 2023.

Real output growth of the Republic of the Marshall Islands appears to have slowed sharply in FY2003 and again in FY2004. The 2005 Article IV Consultation highlights that the economic activity has been hampered by delays in implementing an upgraded public works program and the closure of a large privately owned tuna processing plant. The fiscal position deteriorated in FY2004. This deterioration reflects, on the revenue side, a decline in grants aimed at infrastructure projects owing in part to delays in initiating projects, lower income tax collection, and volatility in nontax revenue.

The Britannica Book of the Year 2013 provides a valuable viewpoint of the people and events that shaped the year and serves as a great reference source for the latest news on the ever changing populations, governments, and economies throughout the world. It is an accurate and comprehensive reference that you will reach for again and again.

The Britannica Book of the Year 2014 provides a valuable viewpoint of the people and events that shaped the year and serves as a great reference source for the latest news on the ever changing populations, governments, and economies throughout the world. It is an accurate and comprehensive reference that you will reach for again and again.