- Total external debt: $454 million
- Population: 63,266
- Percentage of adults who can read and write: 88%
- Average life expectancy: 75.6 years
- Total health spending: 2.4% of GDP (2003)
- Total spending on debt service payments: 6% of GDP
- Annual GDP: $0.3 billion
(Statistics from World Bank, 2005, and UN Human Development Report, 2005)
The Marshall Islands consist of two chains of coral atolls – coral deposits on the rim of submerged volcanoes – together with more than 1,000 islets, just north of the Equator. The islands were occupied by the US for several decades after World War II. They are now a sovereign nation under a Compact of Free Association with the US.
Two of the islands were used by the US for nuclear weapons testing between 1946 and 1958. One has been partly decontaminated, but the other remains uninhabitable. The victims have received some compensation but the Marshall Islands is pressing for more.
Where has the debt come from?
The US controls the security and defence of the islands, which receive millions of dollars in aid every year. This makes the islands financially dependent on the US, as a poor country where imports dwarf exports, unemployment is high and many islanders live by subsistence farming.
Debt cancellation status
The Marshall Islands is officially classed as a lower middle-income country by the World Bank. It is therefore not eligible for the Heavily Indebted Poor Countries initiative or the Multilateral Debt Relief Initiative. Nor is it eligible for additional multilateral debt relief from the UK under the UK MDRI. This is regardless of the size of its external debt in comparison to the value of exports, its domestic debt or what the Marshall Islands needs to spend on tackling poverty.
The New Economics Foundation calculates that the Marshall Islands requires 89% debt cancellation in order for the government to meet the basic needs of its citizens, such as health, education and infrastructure, without taxing those living below an ethical poverty line of $3 a day.
Sources of information:
BBC country profile