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ADB’s Work in the Marshall Islands

Gearing Up for Self-Sufficiency

ADB fisheries development loan
ADB’s first loan supported fisheries development

The Marshall Islands needed a new hospital, but the joint efforts of the government and ADB produced much more than that. The partners are now facing the challenges of the future together.

On the atoll of Ebeye, where about 20% of the population of the Marshall Islands live, life was difficult in the 1990s. A new hospital was urgently needed for the 11,000 people living on the atoll, but operating the hospital would require a reliable supply of power and water, and a modern sanitation system, which the small island lacked.

ADB and the Government of the Marshall Islands took an integrated approach to solving the problem that acknowledged the interrelationship between health, sanitation, and hygiene.

The Ebeye Health and Infrastructure Project, which was approved in 1999, rebuilt the atoll’s hospital, provided reliable water and sanitation, and upgraded power generation and distribution to the whole island. ADB contributed almost $9 million to the eventual $10.7 million project cost. The project benefited the people of Ebeye by improving health care provision and living conditions, reducing the quality-of-life disparity between Ebeye and the main urban center, Majuro.

The availability of safe water resulted in a lower incidence of waterborne diseases, and fewer visits to hospitals and clinics. Children’s truancy rates dropped once they no longer needed to fetch water, and women had more time to engage in productive activities. An assured supply of electricity and water also meant fewer class disruptions as well. Fully equipped hospital operating rooms and qualified doctors enabled more medical procedures to be carried out on the island and improved the level of postoperative care.

The Marshall Islands is among the 10 smallest states in the world, and it struggles with the challenges of a dispersed population and a remote location far from potential markets for the country’s goods.

ADB’s first loan to the Marshall Islands was in 1991. ADB invested $3.4 million in the Fisheries Development Project, which helped develop the country’s most important natural resource and economic asset. From there, the work expanded in the 1990s to projects in education, health, and water supply. ADB also supported the Public Sector Reform Program, which helped stabilize government finances, ensure the sustainability of efficiency gains, and improve the environment for private sector activities.

"…together forge new levels of understanding, together create and broaden the horizon of our vision, and together cement an enduring common purpose. I believe this is the meaning of a true and abiding partnership."

Christopher Loeak
Marshall Islands

During 2004–2009, loans and grants were suspended, but the country continued to benefit from technical assistance to improve the business environment. Loans resumed in 2010 after the government caught up with its repayments, and ADB and the government continued their work on one of the greatest challenges facing the Marshall Islands: to successfully achieve long-term fiscal self-sufficiency.

Much of the country’s revenue in the last few decades has come from grants linked to a Compact of Free Association with the United States, an economic and security agreement that is set to be phased out by 2023. The reduction of incoming revenue from the Compact grants puts pressure on the government’s ability to deliver vital basic services.

Water supply and sanitation facility
A water supply and sanitation facility in Ebeye

In 2009, the government began several initiatives to promote macroeconomic stability and sustainable growth. A new Public Sector Program, approved by ADB in 2010, aimed to improve the government’s fiscal discipline, increase tax revenues, improve the performance of selected stateowned enterprises, and ensure effective stakeholder participation in public sector reform initiatives.

One of the program’s major milestones was the implementation of a comprehensive recovery plan for the Marshalls Energy Company, which was struggling to keep the country’s lights on. ADB loan funds were used to restructure the company’s debt, and the savings were used to refurbish a generator, which resulted in higher electricity output and lower fuel usage.

Planned assistance in the future will focus on quality basic education, public financial management, outer islands transport, and strategic planning for renewable energy investments. ADB’s work today is designed to improve the country’s infrastructure and support a more self-sufficient Marshall Islands.

This article was originally published in a special edition of Together We Deliver, which tells 50 stories highlighting the importance of good partnerships in Asia and the Pacific in meeting the complex development challenges of this dynamic region.