Politics
Washington Play Hardball
Wake-Up Call for Marshalls, FSM on Future Funding.
If Federated States of Micronesia and the Marshall Islands leaders were anticipating tough economic renegotiations with the U.S., they received confirmation late last year that it’s going to be an uphill battle to secure anything close to the level of funding the Americans have provided for the first 15 years of the Compact of Free Association. The approximately $2.5 billion ($1 billion to Marshall Islands, $1.5 billion to FSM) provided by Washington "led to little improvement in economic development," said a detailed General Accounting Office (GAO) report in September.
It’s a contention that most island leaders dispute, but the GAO report is giving ammunition to American Congressmen who want to slash funding to the two central Pacific nations.
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The first “bomb” hit the FSM in early November, when chief U.S. State Department negotiator Allen Stayman responded to an FSM economic assistance proposal by essentially cutting the amount requested in half. FSM lead negotiator Peter Christian, a Senator in the FSM Congress from Pohnpei, said the FSM side "was disappointed" by the counter offer because "our proposal took years of careful research, historical analysis and fact finding, which resulted in figures that are justifiable."
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The second “bomb” was dropped on the Marshalls in the form of an "op-ed" column by Representatives Doug Bereuter (R-Nebraska) and Don Young (R-Alaska) published in the Marshall Islands Journal in mid-December, which said the underlying problem with the current Compact of Free Association isn’t the level of funding provided. "It is one of how the Marshall Islands government has mismanaged this largesse," they said, adding that if the Marshalls does not demonstrate clear progress in reforming its government, it will not continue to receive large scale.
The Compact’s economic provisions expire in October — with a two year grace period during which funding is guaranteed in case, as is likely, negotiations can’t wrap up by the end of 2001.
GAO auditors "testified before Congress that waste, fraud, mismanagement and misuse of funds continues to be a serious problem," the two Congressmen said in their message to the Marshall Islands. While acknowledging that some of the responsibility lies with the U.S., Bereuter and Young said "we cannot ignore the failure of the Marshall Islands government to live up to its part of the contract. Despite massive aid, hospitals and schools are in disrepair and lack basic supplies."
They implied that the one-year-old government of President Kessai Note is paying lip service to the reform process and called on the government to take action. But officials in the FSM and Marshalls say that many governmental reforms about which U.S. officials are raising questions are already in place. Marshalls Foreign Minister Alvin Jacklick, interviewed prior to publication of Young and Bereuter’s letter, said "we don’t have to wait for someone to tell us that we have to tighten our financial management. The U.S. government talks about accountability, but we’ve already realized the need for that."
Both the Marshall Islands and FSM governments objected to many of the GAO’s conclusions. Marshall Islands Ambassador to Washington, D.C. Banny deBrum said that contrary to GAO claims, the Marshall Islands modernization of the "woefully inadequate social and physical system of infrastructure left behind by the (U.S.) Trust Territory has not only enhanced the quality of life in the Marshall Islands, but also provided the necessary foundation for private sector growth."
FSM Ambassador to Washington Jesse B. Marehalau disputed the GAO findings by commenting: "Starting from a virtually non-existent economic position, with leaders who had only the thinnest exposure to governance…the FSM in the first 13 years of the Compact achieved its first priorities (and those of the U.S.) by establishing solid democratic institutions that have served to maintain social and political stability."
He called it a "disservice" for the GAO to suggest that the U.S. Congress should approach the new Compact package "with the notion that the Compact assistance has been wasted."
But that appears to be exactly how Bereuter and Young — two key leaders in the House whose committees control money for the islands — are approaching the talks.
One of its major recommendations of the GAO report is that the "full faith and credit" provisions of the current Compact funding — which have guaranteed U.S. payments each year since 1986 — be removed from any future agreement, to give the U.S. more leverage to insure accountability.
One criticism that irks island leaders is the contention that nothing has been done with Compact money. The American-administered trust territory was jokingly referred to as the "rust territory" for its lack of development progress in the 1970s. "If we compare development now with the trust territory period, it’s much different," said Jacklick. "I hope that the U.S. government appreciates this."
The Marshalls, especially, readily acknowledges that some mistakes and bad decisions were made in the use of Compact funds. But both the Marshalls and FSM hope that the U.S. will see beyond the GAO bean counting to the bigger picture of the long-term, special relationship that exists with the U.S. — and that Compact funding, for all its problems, has established two stable and functioning democratic nations in the north Pacific.
