The service industries, which are dominated by public
administration, contribute most of GDP. However, at least
half the population still relies on agriculture and fishing.
The majority of agriculture consists of cultivation and
animal husbandry (pigs and poultry) for their own
livelihood. Breeding of bananas, coconuts, jams, cassava and
breadfruit occupies only a small part of the area. An
important source of income is the leasing of fishing water
to Japanese companies.
There is almost no industry, but construction and small
crafts (sewing, carpet weaving, boat building) have some
significance. Exports (consisting mainly of fish, handicraft
products and bananas) cover only a small part of imports.
The country also has a growing tourism industry.
Tourism and gastronomy
COUNTRYAAH, the country has great potential for tourism, but the
poorly developed infrastructure is an obstacle. With
financial support from the United States, efforts are being
made to improve airports and ports, among other things. Many
of the approximately 20,000 annual tourists visit war scenes
from World War II and the ruin city of Nan Madol on Phnpei.
Around the islands there are good opportunities for deep sea
The basis of domestic cuisine consists of fish, seafood,
coconuts, breadfruit, taro, bananas and cassava. The fish is
usually served grilled. Mangrove crab with fried breadfruit
is a specialty, but it can be difficult to get hold of. On
the other hand, it is easy to find Japanese and Chinese
restaurants, imported canned meats and other Western whole
canned foods. Poultry is common and is often included in the
Asian-inspired rice dishes. Coconut milk is the usual drink.
Economy and business
The basis for the economy is US economic aid, a growing
fishing industry, growing tourism and agriculture as well as
self-sufficiency fishing and a growing fishing industry. US
aid has been gradually reduced since 1986. Public business
is the main driver of the economy.
Fishing is the most important natural resource.
Agriculture is run almost exclusively for self-sufficiency,
covers 60 percent of the country's needs and employs nearly
half of its citizens; main products are bananas, copra,
cassava, sweet potatoes and pepper. The industry is very
little developed and mainly based on coconut products. At
Kosrae there is a fish processing company. Craft production
is small. Private sector growth is slow.
Large distances hamper business development.
Most of the imports (including finished goods, foods and
medicines) are from the United States. Major exporting
countries are the United States and Japan.