Program C1: Micro-Finance Services

Objective

• Encourage economic growth through providing access to small loans and credit,
  particularly for those in the community who have difficulty accessing current credit
  facilities.

Measures

• Number of small loans provided to individuals and credits

• Default rate on loans

• Total value of loans provided

• Economic development on outer islands linked to access to credit

Background

• A key obstacle to the development of income-generating opportunities and small-scale businesses, particularly on the outer-islands, is a lack of access to credit.  Access to micro-finance can enable individuals or families to purchase basic tools and equipment to then generate income, such as tools for farming, small boats for fishing or tools and other equipment.

• Various examples of the success of these programs in economic development can be seen around the world, including the famous Grameen bank in Bangaladesh.

• This program requires considerable attention from the Ministry to facilitate the establishment of a micro-finance facility in the Marshall Islands, that can provide access particularly to outer island communities.

Strategies

• Investigate possible institutional arrangements for a micro-finance service

• Work with key stakeholders to develop an approach to microfinancing

Key Stakeholders and Partners

• Marshall Islands Development Bank (MIDB)

• United States Department of Agriculture (USDA)

• Small Business Administration (SBA-US)

Possible Issues/ Constraints

• The establishment of a micro-finance facility can not be done directly within the existing institutional structure of the Ministry of R&D, thus the success of this program depends very much on the degree of participation of other stakeholders, including the MIDB.

Program C2: Small to Medium Business Development

Objectives

• To enhance employment growth in the private sector through business creation/ expansion;

• To encourage economic growth through sustainable business development; and

• To start to promote export-oriented growth through expansion/ diversification of the markets.

Measures

• Number of jobs created and sustained as a result of SBDC activities;

• Number, type and size of businesses established or developed through SBDC activities;

• Impact on outer island, low-income or disadvantaged communities.

Background

• The Small Business Development Centre has been established under a technical assistance program from the US Small Business Administration. 

Strategies

• Provision of high-quality one-on-one counseling sessions to deliver management and technical assistance to existing and prospective businesses;

• Provide workshops that cover the basics of starting and running a business;

• Identifying business opportunities in the RMI including the areas of: Agriculture;     Aquaculture and fisheries; Tourism; Small-scale manufacturing; Handicrafts; Retail outlets; and Service industries.

• Identifying and facilitating access to sources of capital and credit including the MIDB and other banks, and also private investors or business partners- to focus on outer islands or similarly disadvantaged communities;

• Actively networking in the business community through the Chamber of Commerce and other business-oriented associations; and

• Leverage agriculture extension visits to outer islands as a way to deliver information about services.

Key Stakeholders and Partners

• Small Business Administration (SBA)- USA

• Pacific Island Small Business Development Center Network (PISBDCN)

• Majuro Chamber of Commerce

• Ebeye Chamber of Commerce

• Marshall Islands Development Bank

• Pacific Business Centre, UH Honolulu

Possible Issues/ Constraints

• The main constraint for the SBDC is the access to micro-finance facility for our clients.

• Another constraint is the access to outer islands and the communities of the outer islands.  This will require careful planning for travel and also linking closely with visits by the Agriculture Extension Officers.

Program C3: Investment Information and Facilitation Services

Objective

• To increase foreign and domestic investment in the Marshall Islands

• To facilitate the administrative processes for investment

Measures

• Amount of foreign investment in the RMI, by business type;

• # of Foreign Investment Business License issued by type and amount;

• # of local business licenses issued (by atoll);

• # of jobs created locally;

• # of joint local/ foreign investment partnerships ; and

• # Increase in number of queries .

Background

• This program is designed to facilitate and promote foreign and domestic investment in the Marshall Islands for greater self-sufficiency, alleviation of poverty, increased employment opportunities and the other social benefits of greater economic activity such as improved education and health systems.

• A focus of this program is to identify and reduce administrative barriers to investment.

Strategies

• Development of economic partnerships between foreign and local companies

• Development of policies that encourage investment

• Provision of clear, succinct and up-to-date information to investors

• Streamline investment-related administrative processes

• Track investment activities through collection and management of information  (Info Mgt Strategy)

• Actively promote the Marshall Islands’ investment opportunities and investment climate to potential investors

• Encourage sustainable development by assessing investments for their social, environmental and economic impact (coordinating with EPA and EPPSO)

• Provide assistance in obtaining administrative approvals to investors on an ongoing basis

• Develop local awareness of foreign investment

Key Stakeholders and Partners

• EPPSO

• Attorney-General’s Office

• Foreign Investment Advisory Service (FIAS- Australia, World Bank, Forum Secretariat)

Possible Issues/ Constraints

• There needs to be improved collaboration with the AG’s office to gather investment data.

• Need to develop a good working relations hip with the Chambers of Commerce. 

Program C4: Trade and Investment Policy

Objective

• Develop Trade and Investment Policies to contribute to the economic development of the RMI.

Measures

•  Increase in investment in the RMI.

Background

•  While Trade and Investment Policy is a critical part of private sector development in the
  RMI, there is limited capacity to carry out effective policy development. The Ministry will
  need to focus on recruiting, developing and retaining human resources to fill this role.

Strategies

•  Solicit technical assistance for policy development from international agencies
  (listed here as stakeholders);

• Identify and remove barriers to investment;

• Identify opportunities to develop Marshallese industry using policy tools (such as
  trade tariffs) while still complying with necessary trade agreements;

• Carefully assess the costs and benefits of international trade agreements for the
  RMI.

Key Stakeholders and Partners

• UNESCAP
• UNIDO
• WTO
• FIAS/ ADB
• Forum Secretariat
• Customs
• Quarantine

Possible Issues/ Constraints

• At the time of writing, the position of Trade and Investment Policy Officer was vacant.
  There may be difficulty in recruiting a suitably qualified person for this role.