Economic Development of Hawaii

Hawaii, with an area of 28,313 sq. km (10,932 sq. mi.), is the
43rd largest state in the U.S.; 6.9% of the land is owned by the
federal government. It consists mainly of the Hawaiian Islands, eight
main islands and 124 islets, reefs, and shoals. The major islands in
order of size are Hawaii, Maui, Oahu, Kauai, Molokai, Lanai, Nihau,
and Kahoolawe. Population growth has increased by 80,000 persons over
the past five years. Demographics show a large number of Hispanic
origin: Asian Hispanics are the most populated with white Hispanic
and Asian non-Hispanic following. Hawaii’s economy has been long
dominated by plantation agriculture and military spending. As
agriculture has declined in importance, the economy has diversified to
encompass a large tourist business and a growing manufacturing
Hawaii’s economy has changed drastically since statehood. In
1958, defense, sugar, and pineapple were the primary economic
activities, accounting for 40% of Gross State Product (GSP). In
contrast, visitor-related expenditures stood at just over 4% of
Hawaii’s GSP prior to statehood. Today the positions are reversed;
sugar and pineapple constitute about 1% of GSP, defense accounts for
just under 11%, while visitor-related spending comes close to 24% of
The movement toward a service- and trade-based economy becomes
even more apparent when considering the distribution of Hawaii’s jobs
across sectors. The share of the economy’s jobs accounted for by
manufacturing and agriculture have declined steadily since 1959 and
each currently makes up less than 4% of total jobs in the economy. At
the same time, the shares of jobs in wholesale and retail trade and in
services have risen, standing at about 23% and 28%, respectively.
Since 1991, Hawaii’s economy has suffered from rising rates of
unemployment. This stands in marked contrast to…

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