Marshall Islands

The purpose of this Country Strategy Paper (CSP) is to provide a framework for EC co-operation with the Republic of the Marshall Islands (RMI) under the Cotonou Agreement. The framework is based on global objectives of EC-ACP co-operation, RMI’s own development policy, an analysis of the political and economic situation in the country, and an assessment of the past co-operation programmes of the EC and other donors. It concludes with the proposed EC response strategy of the 10th EDF and an Indicative Programme.

The Republic of the Marshall Islands is composed of 29 coral atolls and low-lying islands scattered over a large part of the central Pacific, with few accessible natural resources to sustain the small population of around 56,000. The land area is 181 square kilometers spread over 1.94 million square kilometers. With an Exclusive Economic Zone of more than 2 million km², RMI has an abundance of fish and other marine resources.

RMI became signatory to the Cotonou Agreement on 23 June 2000. Under the 9th EDF the focal sector was renewable energy.

In 1986, the RMI became an independent nation and established a bilateral agreement with the USA, known as the Compact of Free Association. RMI has maintained a stable and democratic government since independence. The principal feature of the small RMI economy is a semi-subsistence sector, still based primarily on copra production, alongside a limited, modern service-oriented sector which is mainly sustained by the expenditures of the government and the U.S. military base. Recent statistics indicate no real growth in national income per capita since independence – in 2006 GDP was estimated at US $ 2,900 per capita.

Despite having one of the highest per capita GDP among the Pacific ACP, the RMI has some of the worst social indicators. Among other things, infectious and lifestyle diseases are at close to epidemic proportions, the rate of infant and child mortality is high albeit improving slowly, teenage pregnancies are increasing, alcohol and tobacco use are high, and the rate of suicide is alarming. The national budget is highly dependent on foreign assistance to sustain even basic administrative and operational costs.

Declining social conditions, including environmental hazards related to poor housing and waste disposal, as well as weakening social organization in the expanding urban centers of Majuro and Kwajalein Atolls, are evident. Other pressing environmental concerns are the quality and security of supply of drinking water and accelerated rates of coastal erosion. RMI is highly vulnerable to extreme climatic events and to sea-level rise. Future changes in climate will likely worsen conditions in climate-sensitive sectors such as water and sanitation, infrastructure and access to inshore marine resources. Addressing the basic energy needs of the outer islands through a sustainable, environmentally sound and secure energy supply can supplement the long-term energy needs of the country and reduce the dependence on imported fossil fuels.

Under the 10th EDF, the focal sector will be Water and Energy, in particular renewable energy, in support of outer island development, to be delivered, if deemed desirable and feasible, via a Multi-Country Programme. The A envelope (programmable funds) is € 5.3 million and the B envelope (to cover certain unforeseen needs) is € 0.5 million. It is proposed to allocate 85 percent of the A envelope or € 4.5 million for the development of the renewable energy sector. Non State Actors will be encouraged to participate in the implementation of the programme. The remaining 15 percent (€ 0.8 million) will be used to establish a Technical Co-operation Facility from which necessary Technical Assistance, studies and essential EDF-related activities will be funded.