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THE MARSHALL ISLANDS
OverviewOIA Field Office and U.S. Embassy in Majuro, Marshall Islands
Introduction
The strategic and economic relationship between the United States and the RMI goes back to the end of the World War II. Soon after the War, the Marshall Islands became a part of the United Nations Trust Territory of the Pacific Islands, which the United States administered until its dissolution in the late 1970s. The RMI became a sovereign nation in 1986 and entered into a formal strategic and economic pact, the Compact of Free Association, with the United States. Under the Compact, the United States retains exclusive access to the RMI’s territorial waters and ground facilities for civilian as well as military objectives in return for economic and financial aid, the defense of the RMI and the right of RMI citizens to migrate to the United States and its territories. The first financial package under the Compact covered 1986-2001 and, as stipulated, the two sides negotiated a second and terminal financial package that covers 2004-2024. At the end of this period, an income stream from a trust fund which was set up as a part of the second financial package will replace Compact grants. The RMI’s main difference from the FSM and Palau, the other two freely associated states that have similar compacts with the United States, is the presence of a U.S. military base in the RMI. The Ronald Reagan Ballistic Missile Defense Test Site (Reagan Test Site, RTS) is an important income source for the RMI. It employs a large number of RMI residents and pays land rent to landowners on Kwajalein Atoll, where RTS is located.
The RMI Economy
In 2006, the RMI’s GDP was $137.8 million, up 4.9 percent from the year before. Over the last several years, the RMI economy has performed more favorably than that of its neighbor, the FSM. The main factor behind growth has been the bulging public sector which has benefited from other grants from other donors, such as Taiwan. According to the RMI government, real (adjusted for inflation) GDP increased ever year in 2000-2006, and growth rate averaged a respectable 3.7 percent a year. Noteworthy about the composition of the RMI’s GDP is the slow but steady rise of the public sector as a share of total output. In 1997, for example, the public sector was 38.6 percent of total output. In 2006, it was up to 42.5 percent. Private sector was 53.7 percent in 1997. It went down to 50.1 percent in 2006. These changes in the relative shares of the public and private sectors signify a trend that is not only unhealthy for the economy but eventually unsustainable.
EmploymentPayroll employment data show patterns similar to those of GDP. Total public sector employment has consistently dominated employment since 1997. Ranging from 41.7 percent to 48.0 percent, total public sector employment averaged 44.7 percent of total in 1997-2006. Total private sector employment averaged 37.6 percent during the same period. An important point about the private sector employment pattern is that it has trended upward during this period, but the upward trend has been so slow that it would take a long time to make a large difference in the overall employment picture. Other employment, mainly at the U.S. military installation on Kwajalein, remained stable over the 1997-2006 period.
Among the peculiarities of the RMI’s labor market is the ratio of payroll employment to total population. In economies such as the United States, for example, just about half of the population is payroll employees, that is, persons who work for pay. In the RMI, as in the FSM, the ratio has remained quite low. A low ratio, 17.0 percent in 2005 for the RMI, suggests potential for economic and financial challenges in the future since a small percent of the population has to support the whole. Another problem the RMI government and business have to confront is the relatively high rate of unemployment. Based on estimates made by the RMI’s Economic Policy, Planning and Statistics Office (EPPSO) in 2004, the unemployment rate was an estimated 33.6 percent. The subsistence economy accounts for a small part of the total economy, averaging 6.1 percent of GDP through 1997–2004. Even after accounting for subsistence which meets a part of household demand for food and provides some work, the rate of unemployment has remained high. More detailed information on the economy is available in the Annual Compact Reports. HistoryThe Marshall Islands were claimed by Spain in l592, but were left basically undisturbed by the Spanish Empire for 300 years. In l885, Germany took over the administration of the Marshall Islands and located trading stations on the islands of Jaluit and Ebon to carry out the flourishing copra (dried coconut meat) trade. Marshallese iroij (chiefs) continued to rule under indirect colonial German administration. The traditional iroij system is still in use today.
At the beginning of the First World War, Japan assumed control of the Marshall Islands, first under civil and then a naval administration. Japan's headquarters remained at Jaluit. United States Marines and soldiers with naval and air support took control from the Japanese in early l944 following intense fighting on Kwajalein and Enewetak atolls. In l947, the United States entered into agreement with the United Nations Security Council to administer the former Japanese mandate, of which the Marshalls were a part, known as the Trust Territory of the Pacific Islands. In recognition of the evolving political status, on May l, l979, the United States recognized the Constitution of the Marshall Islands and the establishment of the Government of the Marshall Islands (RMI). The Compact
The Government of Marshall Islands and the Government of the United States signed the first Compact of Free Association on June 25, l983. President Ronald Reagan signed th The status of free association recognizes the Marshall Islands as a sovereign, self-governing state with the capacity to conduct foreign affairs consistent with the terms of the Compact. The Compact places full responsibility for the Marshall Islands' defense with the United States. The basic relationship of free association continues indefinitely. In 2003, the U.S. and the RMI signed the second Compact or what is called the Amended Compact Act of 2003 (
GovernmentThe legislative branch of the government is made up of the Nitijela (parliament) with an advisory council of Iroij (high chiefs). The Nitijela has thirty-three members from twenty-five districts who are elected for concurrent four-year terms. Members of the Nitijela bear the title of senator.
The executive branch is under the leadership of the President, who is elected by the Nitijela from among its membership. Cabinet members are selected by the President also from the Nitijela. Mr. Amata Kabua was elected as the first President of the Marshall Islands in l979 and was subsequently re-elected to four-year terms in l984, l988, 1992, and 1996. Born in 1928, a native of Jauit Atoll and one of the Marshall Islands’ three iroij laplap or paramount chiefs, President Kabua continued in office until November 13, 1996, when he was medi-vac’ed from Majuro to Honolulu. He died in Honolulu on December 20, 1996, at Queen’s Hospital. Mr. Imata Kabua was elected President on January 14, 1997. The current president, His Excellency, Kessai Note, was elected third President of the Marshall Islands in January 3, 2000. He was subsequently re-elected in November 2003. President Note is the first President to be elected who is not a traditional iroij. The Republic of the Marshall Islands has four court systems: Supreme Court, High Court, District and Community Courts, and Traditional Rights Courts. Trial is by jury. Jurisdiction of the Traditional Rights Court is limited to cases involving titles or land rights and other disputes arising from customary law and traditional practice. The Marshall Islands Ambassador to the United States is H.E. Banny DeBrum and the United States Ambassador to the Marshall Islands is H.E. Clyde Bishop. The United Nations and Bilateral RelationsOn September 17, 1991, the Marshall Islands became a full-fledged member of the United Nations. The Marshall Islands is a close voting ally of the U.S. and Israel at the UN. The Marshall Islands has established bilateral relations with 72 countries which includes the USA, Taiwan, Israel, France and the Holy See. For a complete list of countries with which the RMI has relations, click here (
Kwajalein Missile RangeAt home in the largest lagoon in the world, is the U.S. Kwajalein Missile Range. A major subsidiary agreement of the Compact with the Marshall Islands allows the United States continued use in Kwajalein Atoll of the U.S. Army missile test range for up to thirty years. Kwajalein consists of some ninety islands surrounding the largest lagoon in the world. Under a lease agreement with Marshall Islands Government, the U.S. Department of Defense uses the atoll and controls some of its islands. Nuclear IssuesSection 177 of the Compact with the Marshall Islands provided for settlement of all claims arising out of the nuclear testing programs which the United States conducted at Bikini and Enewetak Atolls from l946 to l958. Under Section 177, the US Government has made payments of over $500M which included $135M for Bikini and Rongelap resettlements. Geography
The Marshall Islands is part of the larger geographic region known as Micronesia, or "Little Islands," a myriad of more than 2,l00 coral atolls and volcanic islands scattered across three million square miles of the western Pacific Ocean which includes neighboring island nations such as Palau, the Federated States of Micronesia, Guam, CNMI, Kiribati and Nauru. Each atoll in the Marshall Islands is a cluster of many small islands circling a lagoon. None of these islands is more than a few meters above sea level. Total land area is 70 square miles. The capital is Majuro, which lies some 2,300 miles southwest of Honolulu and nearly 2,000 miles southeast of Guam. Travel Requirements
All U.S. and other citizens traveling to the Marshall Islands must carry a U.S. passport. In the past, birth certificates were acceptable for travel for U.S. citizens however that is no longer the case. Travel for less than 30 days does not require prior entry permission. Travel longer than 30 days must be approved prior to entry by the Marshall Islands Immigration Office in Majuro, Marshall Islands and may be done so in-person if already in the Marshall Islands. Persons who wish to visit Ebeye or other islands of Kwajalein atoll must have authority from the Marshall Islands Government. Separate authority from the U.S. Department of Defense is needed to visit the U.S. military facility on Kwajalein Island.
Employment Requirements for RMI citizens in the U.S.
Marshall Islands citizens are eligible to be employed in the United States without need for the Employment Authorization Document. Click here for Information on Employment Eligibility (
Although the Employment Authorization Document is not needed for employment, it has often served as a valuable second form of identification for other services. For an Employment Authorization Document application, please click here ( In 2005, the Employment Authorization Document for citizens of the Federated States and Micronesia and Marshall Islands was given an extended validity of four years instead of one. For a copy of letter from USCIS stating this change in policy and a downloadable PDF letter to use in applying for an EAD card, please click here ( Immigration Status of RMI citizens in the U.S.
For more details from the U.S. Department of Homeland Security, Citizenship and Information Services on the immigration status of Marshall Islands citizens entering the United States, please click here for the USCIS Fact Sheet. ( FocusIsland Business Opportunities Reports News Items |
e Compact into law on January l4, l986, (Public Law 99-239). The Compact entered into force for the Marshall Islands on October 2l, l986. See Presidential Proclamation No. 5564 in the U.S. Federal Register.
) under Public Law 108-188 for the next 20 years until 2023. Although the basic relationship as enshrined in the first Compact were unchanged (see above), there were significant changes in the financial provisions of the amended Compact. The Amended Compact included creation of a Trust Fund to serve as an ongoing source of revenue after Fiscal Year 2023 and to contribute to the long-term budgetary self-reliance of the RMI. It also provided for sector specific grant assistance in six primary sectors: Education; Health Care; Public Infrastructure; Environment; Public Sector Capacity Building; Environment; and Private Sector Development.
Under the Compact, the State Department is responsible for government-to-government relations, while the Department of Interior’s Office of Insular Affairs is responsible for the oversight and coordination of U.S. programs and funding assistance. 
