Republic of the Marshall Islands Country Brief – April 2008
Introduction
The Republic of the Marshall Islands (RMI) is an independent country in a Compact of Free Association with the United States. RMI is located in the Micronesia region north of Nauru and Kiribati in the South Pacific Ocean.
Political Overview
Government
RMI is an independent country in a Compact of Free Association with the United States. The semi-Westminster style constitution, adopted in 1979, established a Nitijela (Parliament) comprising 33 members, elected every four years by universal suffrage. Every inhabited atoll is represented, with Majuro with five members and Ebeye with three members having the largest representation. While there are no formal political parties in the RMI, there are two political groupings, the Aleon Kein AD (AKA) and UDP. The President is elected from the Nitijela and appoints a cabinet from its members. There is also an advisory council of High Chiefs - the Council of Iroij.
The late President Amata Kabua, the Iroij Laplap or High Chief, was the Nation's Head of State and Head of Government from 1979 until his death in 1996. He was succeeded by his cousin, Imata Kabua, in early 1997.
RMI held elections on 19 November 2007. On 7 January 2008 the Nitijela elected Litokwa Tomeing as President. Key Ministers in the Tomeing Government are John Silk (Foreign Affairs), Jack Ading (Finance) and David Kramer (Justice).
Compact of Free Association with US
On 30 April 1986, after four years of negotiations, RMI and the United States signed a package of amendments to their Compact of Free Association and reaffirmed their special relationship. The Compact left RMI in control of all domestic and foreign policy with the exception of defence and security issues, for which the US is responsible.
A renegotiated compact memorandum was signed 1 May 2004 between the US and RMI and the period of the compact runs from 2003 to 2023. In the renegotiated compact, the centrality of the defence relationship was reaffirmed with provision made for long term (63 years) US access to the Kwajalein Missile Range, at a cost of US$2.3 billion (A$3.5 billion). Under the compact, the US will also provide economic grant assistance over 20 years, and contribute to a trust fund that will provide income after 2024 when the grant assistance ends. Grant assistance and trust fund contributions over the 20-year period are valued at US$800 million (A$1.2 billion). The compact continues to allow citizens of the RMI access to US federal programs, and favourable provisions for travelling to and working in the United States.
Economic Overview
The RMI economy remains dependent on revenue from the US under the compact, with over 80 per cent of government revenue being derived directly, or indirectly, from US grants. The Government is the major employer, followed by the commercial and retail sectors. The construction industry is expanding but there is limited domestic production - fisheries, copra, handicrafts and subsistence agriculture being the most significant sectors.
Commitment to reform
The RMI's failure to use the compact funding provided by the US to promote a sustainable income-generating economy was recognised by the RMI Government in 1996, when it commenced a reform program, assisted by the Asian Development Bank and other donors. The RMI Government took steps to increase considerably its returns from tourism, fisheries and other potential sources of revenue, reduce the size of the public sector and eliminate some subsidies to utilities, Air Marshall Islands and the copra industry. In 1998, the RMI Government announced a further package of reforms to help the general economy over the long-term, including measures to substantially reduce and eventually abolish import taxes. In 2008, precipitated by the fuel price hikes, the RMI declared a financial state of emergency. This included approaches to the ADB, US and Taiwan to secure additional funding.
Economic boost from relations with Taiwan
Government revenue has also been augmented by aid from Taiwan (the RMI established diplomatic relations with Taiwan in November 1998) and by a significant increase in returns from the fisheries sector through the activity in RMI waters of Taiwan purse seine fishing vessels, which also use Majuro as a base.
Bilateral Relationship
Australia has friendly relations with the Republic of the Marshall Islands (RMI). Australia was the second country, after the US, to establish diplomatic relations, in 1987.
Australia has a modest development assistance program with RMI. The estimated total aid budget to the RMI bilateral program was $750,000 in 2008-09. This assistance is focused on scholarships, providing technical assistance and the small grant scheme which provides support to community organisations. Under the Defence Cooperation Program, Australia provides ongoing funding for the Pacific Patrol Boat Program. In 2008-09, the estimated total actual funding to RMI through the Defence Cooperation Program is $775,000.
RMI has provided two police officers to the Regional Assistance Mission to Solomon Islands since May 2006.
Bilateral Economic and Trade Relationship
Australian exports to the RMI in 2007-08 totalled $6.6 million (principally preserved meat, ships and boats). Australia's imports from the RMI in the same period totalled $783,000 (principally plastic plates, sheets and film).
Foreign Relations
RMI is a member of the United Nations and Pacific Islands Forum. The United States is responsible for RMI's defence.
Visitor Information
Australians travelling to The Marshall Islands are advised to consult the Smartraveller travel advice.
Updated June 2009