Business
U.S. Urged to Continue Marshalls' Aid
Despite the end of the Cold War, continued U.S. funding to the Marshall Islands and the Pacific region is justified by American security and economic interests, said a recent economic report on the Marshall Islands by Bank of Hawaii vice president and international economist Wali M. Osman.
Despite the obvious importance of the islands, the relatively small amount of funding for the freely associated states “is often viewed as an area for review and possible reduction (by U.S. officials),” Osman said. But, he said, the “Marshall Islands is an integral part of the U.S. permanent strategic sphere of influence in the Pacific and, therefore, investing in Marshall Islands’ economy and the region is justified by both U.S. security and economic interests in the long run.”
- ADVERTISEMENT -
 |
Osman was also critical of reforms pushed on the Marshall Islands by the U.S. and other donor countries and agencies that have caused “drastic changes,” the long-term consequences of which are far from clear.
Government reforms promoted by the United States, the Asian Development Bank and other donors have worked in large countries, with developed economies, but were inappropriate to the conditions in the area. “In search of efficiency, both the United States and other donors have vigorously applied global market and large economy rules to the small, fragile, isolated, resource-poor and mainly consumptive economies in Micronesia,” Osman said. Reforms were pursued in the Marshall Islands and elsewhere in Micronesia for their “own sake without the requisite natural resources and financial strength of the private enterprise.”
Osman said that “pressure from abroad...to make the Marshall Islands government more efficient and less costly has led to what amounts to drastic changes in the role of government in the social and economic structures…The most critical (consequences) in the short run are losses in wages, taxes and purchasing power that, in the end, are net losses to the economy.”
