Politics
On the Brink
Can a U.S. Compact Deal Be Cut in Time to Replace Current Funding?
The Marshall Islands and Federated States of Micronesia will soon have their backs to the wall. If they want to get new funding agreements into place before the current Compact’s guaranteed funding expires on September 30, 2003, they’ve got about another seven months to do so. If not, they’ll be at the mercy of a U.S. Congress that is less knowledgeable about — and consequently less sympathetic to funding requests from — the Pacific Islands than any in recent memory.
FSM and State Department negotiators launched talks in November 1999. They’ve held several rounds since, but are still far from agreement. Indeed, the FSM has asked the U.S. to provide $1.2 billion over the next 20 years — $400 million of it in the form of trust fund capital. But the U.S. is offering $650 million over 15 years, about 55 percent of what the FSM says it needs. The Marshalls wasn’t as quick to start negotiations. With a change of government a year ago January, there was a gap of nearly two years from the initial October 1999 preliminary session and the first follow-up talks held in Majuro in mid-July. And while U.S. negotiators praised preparations and a new national development plan by the Marshalls, the two sides won’t start talking budget numbers until November.
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Even with greater congressional involvement in the current Compact funding negotiation process compared to the first pact 20 years ago, it is still expected to take more than a year to get the new funding agreements through the congressional approval process. This means that by next April or May, the agreement needs to be in Congress’ hands for review. U.S. chief Compact negotiator Allen Stayman put it in perspective for the Marshall Islands at the July session. “We cannot expect a quick or smooth process in the Congress because it is composed of many new members who are unfamiliar with the Compact, its provisions, and with the historic ties between our two countries,” he said.
A second problem facing both countries is that Compact funding is being negotiated at a time when two recent General Accounting Office (GAO) reports “have cast an unfavorable light” on the governments’ past ability to use U.S. assistance effectively and efficiently, according to Stayman. “The GAO is in the process of completing three additional studies that will also raise questions about the level and structure of future assistance.”
Under the first Compact, the U.S. delivered about $2 billion in development funding and government support to the new governments of the FSM and the Marshalls between 1986-2001 and basically didn’t monitor how it was spent. Now, 15 years later, the U.S. has returned, asking, “What did you do with our money?” Like it or not, the islands are faced with a Congress that has ordered up six GAO audits (no GAO audits were conducted until the final 18 months of the 15 year funding agreement) that, while slapping U.S. agencies on the wrist for their lack of oversight of spending, have raked the two Pacific Island governments over the coals for their spending practices.
Despite the considerable history on their side, and the Marshalls’ Kwajalein missile range, which is taking center stage in President Bush’s push for a missile defense system, how Congress will view future funding is still an open question. But the first order of business is to reach agreement with the U.S. State Department on future funding. Stayman’s status as a Clinton-holdover in a Republican administration could add more uncertainty to getting a deal cut by early next year. He is under attack from a number of influential Republican Congressmen who think Bush should drop him in favor of a Republican-appointee because of a scandal that involved his office — but not him directly — when he was with the Interior Department.
Can they cut a deal by next May? “It’s an ambitious schedule but necessary and doable,” Stayman said. “We need to push ourselves because the negotiations started late,” Marshalls Foreign Minister Gerald Zackios said. “I don’t expect a smooth ride, but I’d like to see the discussions concluded in March 2002, which will give the Congress time to consider it.”
Photo: Giff Johnson
