Marshall Islands

The Marshall Islands represents source-sink dynamics at their most extreme—a $259 million GDP economy where US Compact payments constitute 60-70% of government revenue, financing sovereignty for atolls averaging under 2 meters above sea level. The Compact of Free Association, renewed in 2024, provides over $1 billion in direct assistance since 2004 in exchange for US military access to Kwajalein Atoll, creating a mutualism where American defense capabilities depend on islands that American carbon emissions threaten. Sea level rise proceeds at 2.06mm annually at Majuro, making climate adaptation not planning horizon but present reality. The Marshall Islands has constructed secondary niches: the world's third-largest shipping registry by gross tonnage and, more recently, DAO sector services that the 2024 FATF evaluation flagged for money-laundering risks. In November 2025, the government launched ENRA—a universal basic income distributed via digital wallets—funded by Compact revenues. Debt has declined from 74% to 17.3% of GDP (2002-2024), but this fiscal health masks existential fragility: when your nation's highest point barely exceeds two meters, moderate risk of debt distress matters less than moderate risk of oceanic inundation. The Marshallese face a uniquely stark version of the climate calculus: whether the payments that sustain sovereignty today will outlast the land that defines it.