Stories by Christopher Leonard
Photographs by Benjamin Krain

How the economy of this isolated nation fares will have a direct impact on Springdale and other cities in the United States where Marshallese have immigrated in search of jobs.

On a sunny morning in September, the old economy and new economy came into the Majuro harbor in the Marshall Islands. The old economy arrived in a weathered vessel called The Lona, which carries people and cargo between atolls in the Pacific nation. A barefoot Misako Jacob stepped off the boat, balancing a baby on her hip and still swaying after 14 hours at sea. She paid $28 to make the trip from the Wottje atoll, about 150 miles to the northwest, because she needed to have a tooth pulled.
Her relative Tony Phillips was there to pick her up. He said Wottje has only a small medical dispensary that can’t offer many medical services. “They tell you, ‘Drink two Tylenol every four hours.’ That’s all,” Phillips said.
The new economy was at anchor just yards away, where 12 Japanese tourists gathered on two small boats for a day of scuba diving. The water in the Marshall Islands is among the clearest in the world, divers say, and the reefs are teeming with sea creatures. Each tourist paid $100 for the day’s trip.
Tourists represent a gold mine for the islands where the minimum wage is $2 an hour. If such visitors keep arriving, they could be an economic mainstay for remote atolls like Wottje, said Bill Weza, manager of the Marshall Islands Resort and a government adviser on tourism.
But a tourism-based economy is more a hope than reality, Weza said. The number of vacationers to the islands has declined in the past few years, with just 1,380 tourists in 2003, according the government.
How the economy of this isolated nation fares will have a direct impact on Springdale and other cities in the United States where Marshallese have immigrated in search of jobs. The Marshallese say the lack of opportunity on the islands is the main reason they abandoned their homeland.
Economic development in the Marshall Islands has always been a struggle. Two-thirds of the 58,000 people live on the urbanized islands of Majuro and Ebeye, where the economy is dependent on money from the U.S. government. A 2004 estimate put the median age in the islands at 19.6 years, hinting at a high birth rate that soon could make problems worse. Life expectancy is 69.7 years.
The Marshall Islands government gets 44 percent of its annual revenue from the U.S. Treasury — about $48.3 million in 2003. The two countries have an unusual diplomatic relationship called the Compact of Free Association that provides special privileges for the islanders, including those who move to the United States.
The islands have little in the way of natural resources or wealth. The nation is one of few in the world consisting solely of coral atolls, crescents of sand and reefs formed upon remnants of old volcanoes. The dozens of slender atolls, which combined have about the same land area as Washington, D.C., don’t provide much in the way of agricultural or mineral production.
No one seems to know this better than Ramsey Reimers, an islander of European ancestry and one of the major businessmen on Majuro. His company owns a variety store, two gas stations, a hotel and other ventures, including The Lona transport ship. Reimers sounded a bit glum recently when asked how business was going. He immediately referred to the Compact of Free Association, which provides the country’s economic lifeblood.
“We depend on that money — it comes in and goes around,” Reimers said. He said the economy is “poor” for a simple reason — the United States gradually is reducing its annual payments and plans to end them in 2018 when parts of the compact expire.
The United States will invest $7 million annually into a trust fund as direct funding to the Marshallese government declines. The goal is for the islands to eventually survive using interest payments from the trust fund and revenue from local taxes. When asked if U.S. funding could help the islands achieve self-sufficiency, anthropologist Robert Kiste chuckled.
“That’s what people were saying 40 years ago,” Kiste said.
Kiste was a young graduate student in the 1960s, living on the islands and studying the people of the remote Bikini atoll who had been displaced by U.S. nuclear weapons testing in the 1940s and 1950s. He said funding from the compact was meant to develop the islands but had the reverse effect of making the islanders increasingly dependent on U.S. aid.
“There was really this kind of naive assumption that if you introduced some infrastructure and provided better education and training, there would be economic development that would follow,” Kiste said. “It just hasn’t worked. What is there to develop?” The hundreds of millions of dollars in compact money has done little to develop the Marshallese economy, according to a report from the U.S. Government Accountability Office.
In 2000, the GAO audited compact spending and found that the Marshallese per capita income had declined over the 15 years and that most economic development projects had foundered. Directors on the board of one development group spent $1.1 million on administrative expenses instead of the budgeted $60,000, according to the GAO report. They also threw a $9,000 party in Hawaii.
The auditors concluded that much of the problem resulted from poor supervision. The GAO found that economic development accounted for 23 percent of the spending, while infrastructure accounted for 25 percent and social services for 6 percent. The remaining 46 percent of expenditures were labeled simply as “other.” That category included land leases and “unspecified use of funds.” The revenue from two of the islands’ biggest industries largely is sent out of the country.
The U.S. Army base on Kwajalein atoll’s main island is home to some of the most sophisticated military research in the world. But the high-paying engineering and high-tech jobs on the base go to Americans or other outsiders who work for companies like Lockheed Martin. Marshallese who work on the base do relatively menial tasks like custodial work and food preparation.
Many islanders have been drawn to these jobs, taking up residence on tiny Ebeye island, a 23-minute barge trip from the base. When the U.S. government sent anthropologist Jack Tobin to Ebeye to take a census, he was alarmed at what he found.
“Ebeye with its heavy concentration of population presents serious social, economic and sanitary problems to the Administration,” he wrote. “It is of course difficult to maintain satisfactory standards of health and sanitation under these conditions.” That was in 1954, when 981 people lived on Ebeye’s 90 acres.
This summer, a house-to-house survey conducted by the island’s hospital counted roughly 9,500 people, making Ebeye the most densely populated island in the Pacific. The United States pays about $15 million annually to rent the base and main island of the atoll, which also is called Kwajalein. The money is distributed among the Kwajalein “iroij,” who are like chiefs or kings.
Kwajalein’s remote location makes it ideal for developing missile and space technology. The base plays a key role in attempts to create a U.S. defense shield, sometimes firing off missiles to destroy missiles launched from the mainland during tests.
There is big money in commercial fishing around the Marshall Islands, but the huge tuna boats that often anchor in Majuro’s lagoon are owned by foreign companies, usually Chinese or Japanese. The Marshallese government collects about $3.3 million annually in licensing fees from the boats, but the crews are foreigners. Mike McCoy, a Pacific fisheries consultant, says commercial fishing is better left to those with deep pockets. Otherwise, he said, “The result is that after one bad season, you’re out of business.”
Searching for lucrative employment, thousands of Marshallese have traveled to the United States, where they can work indefinitely without visas because of a provision in the compact. Hundreds of them have ended up at the Kelly Services office in Fayetteville, a few minutes’ drive from Springdale. Stuart Craig, the manager, supplies temporary workers to companies in Northwest Arkansas. Craig has no problem finding work for the Marshallese, who make up about 10 percent of all the workers he places. He said they apply for industrial jobs. When there are openings at a local plant, the news spreads rapidly through the Marshallese grapevine. “Their network is phenomenal. I think they send up bat signals or something,” he said.
The business community largely has embraced this new group of employees. At Tyson Foods’ Randall Road plant in Springdale, more than half of the night shift is Marshallese, manager Greg Bohannan said. The islanders are dependable, hardworking and have blended in well with other employees, he said, echoing the thoughts of other local managers. By 2001, only 7 percent of the Marshallese in Springdale were unemployed, according to the census survey.
While Hispanic immigrants have a highly visible subeconomy in Springdale with Mexican restaurants, grocery stores and specialty shops, the Marshallese have formed a network that reflects a more inwardly focused community. One of their hubs is in the Mathias Plaza strip mall across from the Allen Canning Co. factory in northern Springdale.
At the rear of the mall, nestled next to a thrift store and a dog grooming salon, there is a small unmarked storefront. This is H&T Islands Food Market, the only Marshallese grocery store in Springdale. It is owned by Holmes Tibon, who ran a small shop on Majuro before bringing his family to the United States. All advertising is done by word of mouth.
Inside the tiny store, Marshallese can find items like those back home. Freezers along one side have frozen yellow-fin tuna and other whole fish stacked like cordwood. There are bags of fresh Marshallese doughnuts — $2 a dozen and identical to those sold in grocery stores on Majuro. There are colorful island-style dresses behind a glass counter that holds Marshallese music compact discs and cookies.
There is no Marshallese restaurant in Springdale, but at least two people say they’re thinking about opening one. Traditional Marshallese dishes include fried breadfruit, seasoned fish and “yew” soup, which consists of dough balls cooked with coconut juice. Unlike Hispanic immigrants, most Marshallese don’t send money home to their relatives. Indeed, the Marshallese who’ve immigrated tend to be an economic drain on their families back home.
Reimers, for example, runs a Western Union wiring service out of his company’s Majuro variety store. He said the service is there to wire money out of the country to relatives living abroad. “I still think there’s a lot of money going out to those people from family here. The money’s not sticking, it’s flowing
out,” he said.
The Marshallese in Arkansas say they don’t send money home because they are struggling to make ends meet in their new communities. Almost to a person, they say the hardest part about living in the United States is adapting to the cash economy. In the Marshall Islands, land is still owned by tribal kings. Other people live on it based on clan relationships. Paying cash rent is rare.
A trip to the Majuro hospital — for any ailment — costs a patient $10. The full cost of services is subsidized through compact money. “Here you have to pay for everything,” said Paul Lang, an islander who moved to Springdale several years ago. He said mortgage and rent payments, utility bills and car payments often keep Marshallese in Springdale living paycheck to paycheck.
While they might not be sending money home, there are still great hopes pinned on the Marshallese in
Springdale. Benny Luke, who lives in a crowded neighborhood on Majuro, said children educated in Springdale could be the solution to the country’s economic woes. “The Marshall Islands is just a little dot, floating around in the ocean. But I tell them that something can come out of this white sand and blue water,” Luke said.
Children from Springdale can “come back with all this education and new plans,” he continued. “They can start their own things. If there’s no job at the government, they can go start something.”
The question is, will they?

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