An International Monetary Fund team reviewing economic development and policies in the Marshall Islands says the government must halt deficit budgeting and initiate reforms to boost the business sector while scaling back the government's commercial activities.
The IMF team says growth appears to have picked up in the economy during fiscal year 2005 after having slowed in the 2003-2004 period.
However its says the government's deficit , estimated at two per cent of GDP, is a problem as it erodes the government's financial assets the only resource it has to meet future contingencies.
Hali Edison, head of the group that visited the Marshall Islands, says structural reforms need to be aimed at vitalizing private-sector activity and employment, with the long-term aim of replacing the government as the primary engine of growth
He says this will entail shoring up infrastructure, resolving land issues, and scaling back the government's commercial activities.