MAJURO — The Marshall Islands’ economy grew slightly in 2001 and the trend will continue in 2002 largely as the result of increased United States funding in the last two years of a funding package under a Compact of Free Association, according to a recently released Asian Development Bank report entitled, “Outlook 2002: Economic Trends and Prospects in Developing Asia.”
ADB estimated that revenues in the Marshall Islands grew by 13 percent last year, while expenditures rose just two percent, giving the Marshall Islands a budget surplus in 2001, a development that “marks a continuation of recent trends.”
But ADB noted that “the surplus was required to meet large principal (debt) repayments that peaked in fiscal year 1999 at $42 million and were estimated at $25 million in FY 2001.”
The Marshall Islands struggled with negative or zero growth in the mid- to late-1990s as the government conducted a major ADB-supported reform program, including laying off about one-third of its workforce.
The Marshall Islands remains heavily dependent on funding from Washington, with little productive economy, a fact confirmed by a heavy import-export imbalance. The Marshall Islands brought in about $60 million worth of goods in 2001, while it exported just $8 million, ADB said.
“The pace of growth in 2002 will be about the same as in 2001,” said the ADB report, adding that the outlook for 2003 “will depend on upon Compact negotiations” that are now in progress to determine future funding levels.
