The main economic activities in the Marshall Islands are copra production and fisheries.[3] Under the terms of the Compact of Free Association, Marshallese citizens can travel and work in the United States without visas, which has contributed to more than a 22% population decline over the period 2000–2021.[3]
The Marshall Islands has no central bank.[3] The official currency of the Marshall Islands is the US Dollar.[3]
The subsistence economy consists of fishing and breadfruit, banana, taro, and pandanus cultivation. On the outer islands, production of copra and handicrafts provide cash income. The modern service-oriented economy is located in Majuro and Ebeye. It is sustained by government expenditures and the U.S. Army installation at Kwajalein Atoll. The airfield there also serves as a second national hub for international flights.
Modern economy
The modern sector consists of wholesale and retailtrade; restaurants; banking and insurance; offshore companies registration; construction, repair, and professional services; and copra processing. Company formation in the Marshall Islands is available for residents and non-residents. Non-residents enjoy privacy benefits and zero local taxes. Copra cake and oil are by far the nation's largest exports. A tuna processing plant employs 300 workers, mostly women, at $1.50 per hour. Copra production, the most important single commercial activity for the past 100 years, now depends on government subsidies. The subsidies, more a social policy than an economic strategy, help reduce migration from outer atolls to densely populated Majuro and Ebeye.
Marine resources, including fishing, aquaculture, tourism development, and agriculture, are top government development priorities. The Marshall Islands sells fishing rights to other nations as a source of income. In recent years, the Marshall Islands has begun to offer ship registrations under the Marshall Islands flag. As a small nation, the Marshall Islands must import a wide variety of goods, including foodstuffs, consumer goods, machinery, and petroleum products.
Marshall Islands has signed a bilateral trade agreement with Taiwan in 2019, this agreement has been approved in 2023 and will take effect at a future date.[5]
Coconut oil
Power authorities, private companies, and entrepreneurs are experimenting with coconut oil as an alternative to diesel fuel for vehicles, power generators, and ships. Coconut trees abound in the Pacific's tropical islands. One liter of oil can be produced from the copra of 6–10 coconuts.[6]
Digital Financial Initiatives
In 2018, the Republic of Marshall Islands passed the Sovereign Currency Act, which was later repealed in August 2025. [7]. This was intended to launch a sovereign cryptocurrency and certify it as legal tender.[8][9]
In November 2025, the Ministry of Finance announced ENRA, a universal basic income program, for disbursements of funds to citizens. Eligible citizens have the option of receiving their disbursement through direct deposits, mailed checks and, through a dedicated citizen digital wallet designed specifically for the Marshallese, called Lomalo (which translates to “shared waters” in English). Through Lomalo, qualified recipients can verify their eligibility status, receive benefits in real time, and manage their accounts. The Lomalo digital wallet will help overcome long-standing distribution barriers in the Neighboring Islands, where limited banking infrastructure has historically delayed government transfers.[10]
A digital disbursement channel is made possible by integration with USDM1, the RMI’s Digital Sovereign Bond - a U.S. dollar-denominated sovereign security fully collateralized by short-dated US Treasuries and redeemable at par in U.S. dollars. Because USDM1 is issued and recorded digitally, it enables secure, low-cost electronic distribution of benefits across the Marshall Islands, while all settlements remain in U.S. dollars through existing financial channels. USDM1 is a sovereign obligation of the Republic of the Marshall Islands, supported by the U.S. Treasuries held as collateral by a Qualified Custodian in the United States under New York law. The Treasuries are purchased with proceeds from the issuance of each unit and maintained in a bankruptcy-remote reserve account. This structure mirrors the design of Brady Bonds, through which more than $150 billion of sovereign debt has been issued globally over the past three decades. USDM1 is recorded in digital, book-entry form on the blockchain, enabling transparent, real-time settlement and verification while preserving the legal and prudential safeguards of traditional sovereign securities.[11]
Gross domestic product
GDP: purchasing power parity - $150 million (2011 est.)
GDP - real growth rate: 3% (2011 est.)
GDP - per capita: purchasing power parity - $2 500 (2011 est.)
GDP - composition by sector: agriculture: 22% industry: 18% services: 60% (2008)
The islands have few natural resources, and their imports far exceed exports. According to the CIA, the value of exports in 2013 was approximately $53.7 million while estimated imports were $133.7 million. Agricultural products include coconuts, tomatoes, melons, taro, breadfruit, fruits, pigs and chickens. Industry is made up of the production of copra and craft items, tuna processing and tourism. The CIA estimates that the GDP in 2016 was an estimated $180 million, with a real growth rate of 1.7% while the GDP per capita was $3,300.[12]
Marshall Island productivity
Population below poverty line: NA%
Household income or consumption by percentage share: lowest 10%: NA% highest 10%: NA%
Inflation rate (consumer prices): 5% (2007)
Labor force: NA
Labor force - by occupation: agriculture 48%, industry 12%, services 40% (2008)
Unemployment rate: 8% (2011 est.)
Budget: revenues: $169.5 million expenditures: $112.1 million, including capital expenditures of $19.5 million (FY08/09 est.)
Industries: copra, fish, tourism, craft items from shell, wood, and pearls, offshore banking (embryonic)
Industrial production growth rate: NA%
Electricity - production: 114 GWh (2008)
Electricity - production by source: fossil fuel: NA% hydro: NA% nuclear: NA% other: NA%
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