The services sector is the largest employer, and generates almost three-quarters of GDP. Transport and communications generate 7 percent of GDP; distribution, restaurants and hotels, 18 percent; financial services 14 percent; and public administration and community services, 30 percent.
Much of the high value of this sector comes from servicing the U.S. installation on Kwajalein Island, which is used for missile tracking and weapons testing. Another source of service sector income has been the sale of Marshall Islands passports since 1996. These were initially offered at $350,000 each, and later at $100,000. The islands indicated that they were prepared to sell up to 3,000 passports, and to date the sales have realized about $10 million. The sales were suspended in 1997 but there are plans for resumption. The services sector also supplies the international fishing fleets operating in the waters that surround the islands, serves as an onshore leave destination, and generates further income from the sale of fishing licenses (about $1.5 million to $3 million, a year).
The National Telecommunications Authority is still majority-owned by the government. By virtue of being a monopoly and making relatively high charges for international calls, it manages to cover its costs. Air Marshall Islands is government-owned. It sustained large losses in 1996 and 1997, and its routes have been restructured with plans of eventual privatization .