page_title: Falkland Islands
section_title: Economy
hierarchical_section_title: Falkland Islands / Economy
caption_attribution_description: Port Stanley, from the air
context_page_description: The Falkland Islands is an archipelago in the South Atlantic Ocean on the Patagonian Shelf. The principal islands are about 300 miles east of South America's southern Patagonian coast and about 752 miles from the northern tip of the Antarctic Peninsula, at a latitude of about 52°S. The archipelago, with an area of 4,700 square miles, comprises East Falkland, West Falkland and 776 smaller islands. As a British overseas territory, the Falklands have internal self-governance, and the United Kingdom takes responsibility for their defence and foreign affairs. The Falkland Islands' capital is Stanley on East Falkland.
  Controversy exists over the Falklands' discovery and subsequent colonisation by Europeans. At various times, the islands have had French, British, Spanish and Argentine settlements. Britain reasserted its rule in 1833, but Argentina maintains its claim to the islands. In April 1982, Argentine military forces invaded the islands. British administration was restored two months later at the end of the Falklands War. Almost all Falklanders favour the archipelago remaining a UK overseas territory.
context_section_description: The economy of the Falkland Islands is ranked the 222nd largest out of 229 in the world by GDP (PPP), but ranks 5th worldwide by GDP (PPP) per capita. The unemployment rate was 1% in 2016, and inflation was calculated at 1.4% in 2014. Based on 2010 data, the islands have a high Human Development Index of 0.874 and a moderate Gini coefficient for income inequality of 34.17. The local currency is the Falkland Islands pound, which is pegged to the British pound sterling.
  Economic development was advanced by ship resupplying and sheep farming for high-quality wool. The main sheep breeds in the Falkland Islands are Polwarth and Corriedale. During the 1980s, although ranch under-investment and the use of synthetic fibres damaged the sheep-farming sector, the government secured a major revenue stream by the establishment of an exclusive economic zone and the sale of fishing licences to "anybody wishing to fish within this zone". Since the end of the Falklands War in 1982, the islands' economic activity has increasingly focused on oil field exploration and tourism.
  The port settlement of Stanley has regained the islands' economic focus, with an increase in population as workers migrate from Camp. Fear of dependence on fishing licences and threats from overfishing, illegal fishing and fish market price fluctuations have increased interest in oil drilling as an alternative source of revenue; exploration efforts have yet to find "exploitable reserves". Development projects in education and sports have been funded by the Falklands government, without aid from the United Kingdom.
  The primary sector of the economy accounts for most of the Falkland Islands' gross domestic product, with the fishing industry alone contributing between 50% and 60% of annual GDP; agriculture also contributes significantly to GDP and employs about a tenth of the population. A little over a quarter of the workforce serves the Falkland Islands government, making it the archipelago's largest employer. Tourism, part of the service economy, has been spurred by increased interest in Antarctic exploration and the creation of direct air links with the United Kingdom and South America. Tourists, mostly cruise ship passengers, are attracted by the archipelago's wildlife and environment, as well as activities such as fishing and wreck diving; the majority find accommodation in Stanley. The islands' major exports include wool, hides, venison, fish and squid; its main imports include fuel, building materials and clothing.
caption: Stanley is the financial centre of the Falkland Islands' economy.[120]
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