Republic of the Marshall Islands Country Brief – April
2008
Introduction
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. The President of RMI is Litokwa Tomeing , who is both Head of State and Head of Government.
Political Overview
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 Tony A. deBrum (Foreign Affairs), Jack Ading (Finance) and David Kramer (Justice).
Compact of Free Association with US
On 30 April 1982, 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 original Compact of Free Association with the US was signed in 1982 and entered into effect on 21 October 1986. The Compact leaves the RMI in control of all domestic and foreign policy with the exception of defence and security issues, for which the US is responsible. 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% 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. The export base of RMI is narrow.
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. Progress has been slow, but former President Note committed his government to implement wide-ranging budget and administrative reforms aimed at promoting government efficiency and accountability, stimulating the development of a more dynamic private sector and attracting greater foreign investment.
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 a modest development assistance program with RMI. In 2007-08, Australia’s development assistance to RMI is estimated to be A$496,000, focussed on scholarships and support for community organisations. Under the Defence Cooperation Program, Australia provides ongoing funding for the Pacific Patrol Boat Program. In 2007-08, funding to RMI through the Defence Cooperation Program is estimated to be A$791,000.
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 totalled A$6.37 million in 2006-07, primarily consisting of basic foodstuffs. Imports of animal feed, ferrous waste, motorcycles and textiles were valued at A$288,000 in 2006-07.
Visitor Information
Australians travelling to The Marshall Islands are advised to consult the Smartraveller travel advice.